Investors are finally starting to slow their withdrawals from investment funds that pick big stocks.
More than $4 billion was taken out of unlisted active Australian large cap funds in the first 10 months of last year, according to figures from Morningstar Research.
While that sounds like a lot, it is far better than the $12 billion that was pulled in 2011. Much of the money that was pulled was used to buy shares or low-cost exchange-traded funds, Morningstar senior analyst Tim Wong said. The figures suggest that investment managers who pick stocks - instead of merely trying to follow a share index - are convincing many investors that their expertise is worth paying for. "Managers seem to be sticking to the fight, not shutting up shop," Mr Wong said. 
Index funds listed on the sharemarket such as the Realindex Australian Share fund and SPDR's S&P/ASX 200 ETF have grown significantly in recent years.
The other more recent trend at play here is that investors have started to take some of the money they would have allocated to Australian equities funds and invested that in overseas equities either directly in stocks in another country or with a funds manager with a global mandate.
Meanwhile, broad-based active Australian equities funds managers have struggled to hold onto funds under management.
The funds that have struggled the most in this challenging environment are also some of the biggest names in the business. Ausbil, Perennial Value and Russell are among the retail funds managers that have recorded net outflows in the billions of dollars from retail funds over the past five years, according to Morningstar data shared with The Australian Financial Review.
In the past year, those negative flows have continued for those managers into Australian equities large cap strategies as well as Integrity Investment Management, Nikko Asset Management, Schroders and Ibbotson, among others.
Some of the best brands in the business have not been immune from funds under management net outflows - Lazard, Maple-Brown Abbott, Arnhem Investment Management Australian equities strategies have all experienced outflows in recent years.
Just in the year to   June alone, the $1.4 billion Perennial Value Australian Equities fund, among the hardest hit by net outflows, has seen $220 million walk out the door.
In all, Morningstar estimates the total value of assets in Australian large cap equity-pooled funds was about $98 billion at the end of   September last year.
Despite the negative flows that have been pervasive in the Australian large caps category, there are few examples to point to of funds management firms that have bowed out.
A possible example of an investment firm's change of strategy in Australian equities large caps is the decision by Macquarie in 2013 to merge its active and quantitative equities teams, which resulted in a more quant-focused funds management business.
However, the decision by Macquarie to change its Australian equities strategy was likely more a result of its own high standards for return on equity rather than any issue around profitability, Mr Wong commented.
It seems most managers who have stuck out the past few years expect things to improve from here.
"Everyone in the industry has understood this is a shift, but they know it can't go on," said Oliver Hesketh, a partner with Tria Investment Partners who specialises in consulting with asset management firms.
"Funds remain a good structure for a lot of people to invest in and it feels like we are a long way through that movement where people have walked away from active funds management," he said.
Indeed, Mr Hesketh pointed to funds flow figures that suggested large cap active Australian equities funds managers have begun to creep into positive territory for the first time in the last three years after recording average net outflows of $2.8 billion a year for the past three years.
"The pressure is coming off," he said.
Mr Hesketh pointed to the resilience of the funds management model as the reason why funds management firms have managed to survive despite the difficult period.
"Despite their outflows, it is still small compared with the relative size of the overall funds. These businesses are not run so close to the line and can't stand these relatively moderate outflows," he said.
The funds management business model is known to be among the most scalable business models because it will cost the same for an investment team to manage a portfolio, whether it's in the tens or hundreds of millions of dollars. Funds will profit by taking a percentage of funds under management, which is usually about 1 per cent in the retail market.
Despite the preference for investors to seek out lower-cost alternatives in the form of ETFs in large cap Australian equities in recent years, there have been limited examples of retail funds that have lowered their price to compete, Mr Wong noted.
He said active funds managers have instead looked to design new types of funds to attempt to turn around the outflows.
"New product launches have been a defence mechanism for outflows," Mr Wong said.
Funds managers have launched listed investment companies in an attempt to reach self-directed superannuants who have shown a preference for buying direct shares through a broker. Also, investment firms have designed new products with a strategy related to the specific investment environment, such as high-yield or funds with capital protection to limit downside risk. In the salad days for funds management in Australia around 2000, the industry was raking it in hand over fist, with quarterly flows into active strategies in the $8 billion realm.
Now, a good quarter might see half that amount come in through funds managers' doors.
But with most of the share price declines on the ASX this year posted by the largest and widely held listed companies, investors might be ready to pay for active management again.