Story perspectives

2025: Tech Dominance Leaves Active Managers Struggling

12/27/2025

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Summary

Story summary

In 2025, a small group of technology companies drove much of U.S. stock returns, frustrating active managers.
About 73% of equity mutual funds underperformed their benchmarks as investors pulled money from active management.
Dimensional Fund Advisors' International Small Cap Value Portfolio outperformed by diversifying globally.
Some managers remained confident in tech stocks, predicting continued growth.
By year-end 2025, investors faced a choice between concentrated strategies and risking underperformance.

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Story summary

In 2025, a small group of technology companies drove much of U.S. stock returns, frustrating active managers.
About 73% of equity mutual funds underperformed their benchmarks as investors pulled money from active management.
Dimensional Fund Advisors' International Small Cap Value Portfolio outperformed by diversifying globally.
Some managers remained confident in tech stocks, predicting continued growth.
By year-end 2025, investors faced a choice between concentrated strategies and risking underperformance.