New research from Cerulli Associates finds that passive mutual fund assets have increased 95% since 2008, jumping from $572 billion in 2008 to $1.1 trillion through the first half of this year.
“We have seen a significant increase in passive investment options from investment managers in the aftermath of the 2008 financial crisis,” explains Matthew Pickering, analyst at Cerulli. “The volatile economy and emergence of ETFs have both been drivers in the steady increase in passive flows into mutual funds and ETFs. In fact, both are growing at a significantly higher rate than active mutual funds over the same period.”
To be sure, Pickering noted that active mutual funds still account for more than three-quarters of the industry as a whole, so investors are not completely shifting to passive investment options.
“However, passive mutual funds are currently positioned to have their highest inflows ever this year, quickly approaching their highest yearly total of $69 billion in 2007, so there is a strong shift.”