US investment manager T Rowe Price has warned that it could take years to reverse persistent client outflows, highlighting the difficult environment facing traditional active asset managers as investors increasingly move toward lower-cost index funds and exchange-traded funds.

The Baltimore-based investment group has been under pressure as investors reassess the value of actively managed funds. The shift reflects a broader change across the asset-management industry, where passive products have continued to attract money because of their relatively low fees and straightforward exposure to major markets.

T Rowe Price remains one of the world’s largest asset managers, with about $1.9tn in assets under management during 2026. The company reported net outflows during several periods this year, including $10.6bn in April, when it said withdrawals were driven by several large redemptions.

The company’s challenge is not simply a question of investment performance. Asset managers across the industry are facing structural pressure as institutional and retail investors increasingly compare actively managed products with cheaper index alternatives.

For T Rowe Price, attracting new money will therefore require more than waiting for market conditions to improve. The company has been investing in a broader range of products and strategies, including alternatives, multi-asset investments and retirement solutions, while continuing to emphasize its active-management expertise.

The shift toward passive investing has also changed the economics of the asset-management business. Lower fees mean managers need to achieve greater scale or demonstrate clear value through differentiated investment strategies and stronger performance.

T Rowe Price’s difficulties illustrate why reversing outflows may take considerable time. Even if investment performance improves, investors who have already moved assets into competing products may not return quickly. Winning them back can require new products, stronger distribution and evidence that active management can justify its additional cost.

The company is also operating in a market where investor preferences are changing rapidly. Exchange-traded funds have expanded beyond traditional index tracking into active strategies, fixed income, alternatives and more specialized investment themes, creating additional competition for established fund managers.

Despite the challenges, T Rowe Price continues to argue that active management has an important role to play, particularly in less efficient markets and areas where professional research can potentially identify opportunities that broad market indexes cannot.

The company’s experience reflects a much larger transformation in global asset management. Traditional fund groups are being forced to adapt as investors demand lower fees, greater flexibility and stronger evidence of value.

T Rowe Price’s warning that it may take years to stem outflows suggests that the industry’s shift toward passive investing is not a temporary cycle. For established active managers, rebuilding asset flows could require fundamental changes to products, pricing and the way investment expertise is delivered to clients.

Reference: Financial Times, “US investment giant T Rowe says it will take years to stem outflows” (2026). Financial Times article