Continued shift towards passive in MPS while costs decline

NextWealth finds 14% of MPS assets have moved from active to passive

Isabel Baxter
clock • 1 min read

Over the last 18 months, 14% of managed portfolio service (MPS) assets have moved from active to passive, according to NextWealth.

Its MPS Proposition Comparison Report found that as price pressure mounts, discretionary fund managers (DFMs) continue to allocate a larger share of assets to passive instruments. In the last year, 56% DFMs included in the report have increased their allocation to passive instruments. Only three have increased allocation to active. "The average across the industry is also influenced by the strong growth from DFMs that invest solely in passive," said managing director Heather Hopkins. The cost of owning an MPS continues to decline due to continued downward pressure on the operating ...

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