(Bloomberg) -- T. Rowe Price Group Inc., whose clients have been yanking cash for more than three years, expects the pain to ease in 2025 when actively managed funds attract cash.
“We have a path back to positive flows at some point in 2025,” Chief Executive Officer Rob Sharps said in an interview Friday after the Baltimore-based asset manager reported second-quarter results. But a return to positive flows “doesn’t necessarily mean for the full calendar year,” he added.
The firm — which oversees $1.57 trillion and specializes in actively managed and retirement funds — posted its 13th straight quarter of outflows in the three months through June. Investors pulled $14.9 billion from the company’s equity funds in the second quarter, according to a statement.
Those equity outflows were partially offset by investors adding money to fixed-income, multiasset and alternatives funds set up with Oak Hill Advisors. The inflows to bond funds were due to some large institutional mandates in the quarter.
Shares of T. Rowe fell 3.5% to $111.41 at 11:16 a.m. in New York, paring their advance this year to 3.5%
Investors pulled a net $3.7 billion in the quarter — an improvement from $8 billion of outflows in the prior quarter and $20 billion in the same period a year earlier.
“We have got a very sizable active US equity business that really has been under pressure due to the shift to more passive mandates for an extended period of time,” Sharps said in the interview.
The rate of money leaving active funds will likely slow because fees on active funds have declined, he added.
“The gap between passive fees and active fees is lessening,” Sharps said. “Passive fees really don’t have much in the way of room to go much lower.”
The company is expanding into actively managed exchange-traded funds, which are a small but growing fraction of T. Rowe’s assets.
Its active ETF assets totaled $5.3 billion on June 30.
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