Passive Investing Has Taken the Lead and Appears Unstoppable

As we learned in Hemingway’s The Sun Also Rises, life-changing events can happen in two ways: gradually, then suddenly. That is certainly the case for passive versus active investing. Vanguard launched its first version of an S&P 500 index fund in May of 1976, and it took nearly 40 years for index funds to claim a 30% share of the funds marketplace. Last month, passive investing finally claimed a majority of the fund assets under management in America. In the storm of cultural, economic, and geopolitical news, you may have missed the story, but for the investment industry, it’s a very big deal. It’s an even bigger deal for the American family.