US EditionInvestors Withdraw $1 Trillion from Active Equity Funds Amid Tech Concentration
Investors withdrew around $1 trillion from active equity funds in 2025 as concentrated tech stock gains challenged active management, with 73% of funds trailing their benchmarks, Bloomberg Intelligence said.
- Throughout the year, Bloomberg Intelligence using ICI data said net outflows from active equity mutual funds accelerated while passive equity ETFs attracted heavy inflows as frustration grew.
- A small group of US megacap tech companies dominated returns, and the S&P 500 outperformed its equal-weighted index throughout the year.
- Market valuation measures reveal that on many days in this year, fewer than one in five stocks rose, while Bloomberg Intelligence found that 73% of US equity mutual funds trailed benchmarks.
- Frustration among investors led active managers to face intensified strategic pressure this year, as concentration made it harder for them to perform and many investors grew unwilling to pay for active management.
- Some funds succeeded by Dimensional Fund Advisors LP’s $14 billion International Small Cap Value Portfolio, which returned just over 50% this year holding roughly 1,800 non‑US stocks, while Goldman Sachs Asset Management’s model analyzing roughly 15,000 stocks delivered about 40% gains.
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The concentration in American big tech companies is causing investors to reassess whether it's worth paying for actively managed portfolios that significantly outperform stock market indices.
Investors pull $1 trillion from active equity funds after weak stock selection
Investors spent 2025 pulling money, not adding it. Roughly $1 trillion left active equity mutual funds as frustration built around weak stock selection and a market that refused to reward diversity. The S&P 500 kept hitting records, but the gains came from the same tight group of seven American tech giants. Owning anything else meant falling behind, and investors noticed. Fund managers who aimed for balance faced a brutal setup. A portfolio pack…
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