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How can active stock pickers beat passive tracker funds when the US market is up double digits for the year?
The answer appears to be betting on shares in the companies that provide the passive funds that have been sucking up increasing amounts of the active managers’ assets.
Shares in BlackRock, the world’s largest asset manager by assets and one of the largest operators of exchange traded funds, are up 35 per cent, trouncing the returns of the S&P 500.
Other large ETF providers such as State Street and Invesco have also beaten the wider market. Investors cannot wager on the continued success of Vanguard because it is privately held, but its listed rivals appear likely to continue to profit from the shift away from active to passive fund management.
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