Cerulli Report

The Battle of Passive vs. Active Reaches New Milestone


Author: Funds Society, Miami

  1. Approximately 10 years ago, passive mutual funds and ETFs were neck and neck in the asset race against each other, while they collectively held one-quarter of the marketshare of total mutual fund and ETF assets
  2. Performance aside, the drivers of demand for active and passive are based on attitudes toward management styles, and the belief or lack of belief that active managers can outperform in various market environments or over full market cycles
  3. Geopolitical shock (73%) and recession (69%) are the scenarios most believed to increase demand for active management, while a sustained equity bull market (50%) is the scenario most believed to decrease demand for active management