Fund managers at several active equity funds on the Oslo Bourse have reported significant losses in recent weeks as index-tracking products outperformed them. The trend follows sharp market movements that caught many off guard, leaving active strategies struggling to keep pace with benchmark indices.
The volatility has been driven by mixed economic signals and shifting investor sentiment. Oil price fluctuations and central bank policy signals have added to the uncertainty, creating a difficult environment for stock pickers to navigate. In the past month alone, the OBX Index has gained nearly 8%, while several top-performing active funds have seen declines of 3% to 5%.
Analysts point to the rise of low-cost index funds as a key factor. These products have drawn increasing investor allocations due to their predictable performance and lower fees. "Investors are increasingly favoring transparency and consistency over active management," said a spokesperson for DNB Asset Management.
The underperformance comes despite efforts by some fund managers to adjust portfolios. Several have reduced exposure to sectors hit by recent volatility, such as energy and technology, but the moves have not yet yielded positive results. The Oslo Bourse has seen net outflows from active equity funds for three consecutive quarters.
Industry insiders suggest the shift may accelerate if market conditions remain unstable. "The current environment rewards discipline and cost efficiency," noted an analyst at Norwegian Fund and Asset Management Association. For now, active managers face pressure to justify their fees or risk further investor departures.
Source: e24.no