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  Passive vs. Active Fund Flows
Posted Under: Conceptual Investing
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View from the Observation Deck  
  1. Investors directing capital into mutual funds and exchange traded funds (ETFs) favored passive investing over active management on a massive scale for the 12-month period ended 9/30/20. This has been the case for the past several years.   
  2. Passive mutual funds and ETFs reported estimated net inflows totaling $384.86 billion, compared to estimated net outflows totaling $257.77 billion for those actively managed.  
  3. The largest amount of total net inflows (active and passive) in the period belonged to the Taxable Bond, Municipal Bond and Commodities categories at $369.05 billion, $57.89 billion and $40.81 billion, respectively. 
  4. The only active category garnering more interest from investors than their passive counterpart via net inflows was Municipal Bond. 
  5. In the first nine months of 2020, open-end mutual funds have endured $317 billion of outflows, compared to inflows totaling $313 billion for ETFs, according to Morningstar. Open-end mutual funds are on pace for their worst calendar-year ever in terms of capital flows. 
  6. We intend to monitor net flows moving forward. 
This chart is for illustrative purposes only and not indicative of any actual investment. 

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Posted on Tuesday, November 3, 2020 @ 1:26 PM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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