Fund managers stand to lose approximately $12bn (e16bn) a year in potential management fees, according to TABB Group.
With nearly $1 trillion currently invested in the United States in index-based products such as exchange-traded funds (ETFs), a serious threat to active managers is posed, says TABB.
In a report called Performance Anxiety: A Buy-Side Study of Benchmarks and the Investment Process, research director Adam Sussman says: “The appetite for index-based funds is nearly insatiable, with index-based assets under management increasing by 2,610% since 1993....