The Resurgence of Active Large Growth Management in 2025

The asset management industry is undergoing a seismic shift. After years of passive strategies dominating headlines, active large-cap growth management is staging a comeback in 2025, driven by a confluence of economic and structural forces. From the "great convergence" of public and private markets to the reassertion of home country bias, the landscape is evolving in ways that favor active managers. This resurgence is not merely a cyclical blip but a reflection of deeper, long-term trends reshaping how capital is allocated and managed.

The Great Convergence: Blurring the Lines Between Public and Private Markets

A defining structural shift in 2025 is the "great convergence" between traditional and alternative asset management. Private capital managers are no longer confined to the shadows of Wall Street; they are now competing directly in wealth management, defined contribution plans, and insurance channels, according to a Morningstar report. Innovations such as semi-liquid products, evergreen funds, and public–private model portfolios are eroding the traditional boundaries between asset classes. This convergence has created a fertile ground for active managers, who can leverage their expertise in both public and private markets to craft diversified, dynamic portfolios.

For instance, Brookfield Asset Management's $3 billion acquisition of the remaining stake in Oaktree Capital, as reported by Seeking Alpha, underscores the strategic value of cross-asset capabilities. By integrating private credit and alternative investments into their offerings, firms like Brookfield are redefining what it means to be an active manager in an era where liquidity and flexibility are paramount.

Active ETFs: A New Frontier for Active Management

One of the most striking developments in 2025 is the meteoric rise of active exchange-traded funds (ETFs). Despite representing just 7% of overall ETF assets under management, active ETFs captured 37% of ETF inflows in 2024, according to a Morningstar report. This surge reflects investor demand for strategies that combine the transparency of ETFs with the alpha-seeking potential of active management.

The JPMorgan Large Cap Growth Fund (JLGMX), for example, returned 9.3% in Q3 2025, outperforming many of its peers and placing in the 27th percentile of its category, according to a SSBCrack report. Its success was fueled by concentrated bets on high-growth names like Nvidia and Apple, illustrating how active ETFs can deliver targeted exposure in a cost-efficient structure. As these products mature, they are likely to unlock trillions in "money in motion," further tilting the playing field in favor of active managers, according to a Morningstar report.

Reassertion of Home Country Bias: A Tailwind for Active Managers

Globalization once promised a world without borders, but 2025 is witnessing a reassertion of home country bias. Investors are rotating from global to local exposures, driven by regulatory shifts, geopolitical tensions, and a renewed focus on domestic economic resilience, according to a Morningstar report. This trend plays directly into the strengths of active managers, who can navigate the nuances of local markets with agility and insight.

Consider the performance of the American Century Focused Dynamic Growth Fund in Q3 2025. While its holdings in Alphabet and Tesla delivered outsized returns, its underweight in Apple and Chipotle highlighted the risks of benchmark-relative positioning, according to a SSBCrack report. In a world where local dynamics increasingly trump global trends, active managers with deep regional expertise are better positioned to capitalize on mispricings and sector rotations.

Mixed Short-Term Results, Promising Long-Term Prospects

The performance of active large-cap growth funds in 2025 has been mixed. The Baron Focused Growth Fund, for instance, lagged behind the Russell 2500 Growth Index in Q3, underperforming by nearly 6 percentage points, according to a SSBCrack report. Similarly, the Dodge & Cox Stock Fund returned a meager 3.2%, placing it in the 93rd percentile of its category, according to a SSBCrack report.

Yet, long-term data tells a different story. Over three years, seven of the ten largest active funds outperformed their benchmarks, according to a SSBCrack report. The Fidelity Contrafund, for example, averaged a 32.8% annual return, while the American Funds Investment Company of America Fund delivered 28.5%, according to a SSBCrack report. These results suggest that while active management may struggle in the short term, its value becomes more pronounced over extended horizons-particularly in volatile, structurally shifting markets.

Conclusion: A Structural Shift, Not a Cyclical Fluke

The resurgence of active large growth management in 2025 is not a fleeting trend but a response to profound structural changes. The great convergence, the rise of active ETFs, and the reassertion of home country bias are creating an environment where active managers can thrive. While short-term performance remains uneven, the long-term outlook is compelling for investors willing to embrace strategies that adapt to a rapidly evolving financial landscape.

As the industry continues to evolve, one thing is clear: the days of passive dominance are waning, and the future belongs to those who can navigate complexity with skill, innovation, and a willingness to challenge convention.