The US money management industry is suffering its largest contraction ever, with huge outflows and performance losses leading to a sharp drop in assets under management.

The drop has been especially great in equity funds, which are the industry’s core profit driver. Since fund companies’ fees are based on assets under management, a drop in equity assets results in an immediate profit drop. Money market funds, which are among the few areas to see inflows, do not generate much profit, especially at present when interest rates have been so low that managers have had to waive fees.