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Last summer, data provider Morningstar made headlines when it announced the end of an era: money in passively-managed funds had eclipsed the amount held in actively-managed ones.
This chart shows one small piece of that journey: four years’ worth of flows in and out of active and passive stock funds. It’s a reminder that there’s a sort of yin and yang to investing. It’s not only about investors shunning active managers, nor just about passive funds hoovering up the dollars, but both at once.
Related: More evidence that passive fund management beats active
Over the last four years , Morningstar data released Thursday show, about $850 trillion left active stock funds, and $829 trillion flowed into passive ones.
Ironically, January 2020 was the best month for flows into actively-managed funds of any sort in two years, Morningstar noted. But that was thanks to bond funds. “The taxable-bond group took in a record $63.6 billion, topping the previous record of $50.5 billion set only one month prior,” Morningstar said in a report. “Those flows accounted for almost 77% of all long-term fund inflows in January.”
