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.   

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.  

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. 

The only active category garnering more interest from investors than their passive counterpart via net inflows was Municipal Bond. 

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. 

We intend to monitor net flows moving forward.