(Bloomberg) — Passive is popular, that's for sure.
As Bloomberg's Eric Balchunas reported earlier, 2015 has seen a record $365 billion in net inflows to low-cost and passively managed index funds and exchange-traded funds (ETFs) at the same time that $147 billion has been withdrawn from active mutual funds. Unfortunately for Wall Street and active managers, Bank of America Merrill Lynch analysts led by Savita Subramanian suggest the trend will continue.
"In the past four years, passive investments have gone from one-fifth of long-only assets under management to one-third today," the BofAML team said in a note. They added: "Passive funds still only make up about one-third of the U.S. large cap space, far from critical mass."
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Despite this rapid increase for inflows to passive investments, it still makes up a small share of total funds, as Subramanian said.
If active managers were delivering stellar returns, the trend might change. Alas, they haven't been.
