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Fund Spy

Passive Success

Index funds are on a roll. Will it persist?

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So far in 2012, passively managed domestic-equity funds have trumped their actively managed rivals in more ways than one. In addition to outperforming--albeit by modest margins--in most areas of the U.S. stock market for the year to date through Aug. 6, index mutual funds and exchange-traded funds have enjoyed substantial net inflows so far in 2012, too. Meanwhile, actively managed funds as a group continue to hemorrhage assets. 

Through June, the broad universe of actively managed U.S. stock funds has shed nearly $50 billion in 2012, en route to what seems a certain sixth consecutive year of net redemptions. On the passively managed side, however, investors have sent more than $41 billion to domestic-equity vehicles so far this year.

Shannon Zimmerman does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.