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ARTICLE · 09 NOVEMBER 2017

Active Versus Passive Investment Funds: Should You Let Participants Decide?

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According to a report by Casey Quirk of Deloitte, 72% of money invested into funds went into passive funds in 2015.

United StatesWealth Management
Adam Pechin
Adam Pechin
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According to a report by Casey Quirk of Deloitte, 72% of money invested into funds went into passive funds in 2015. While some may see this as a strong case for passive investing, it is not that simple for plan sponsors.

Trending Passive

Active investing attempts to exceed the stock market, whereas passive investing involves investing in an index fund that follows one of the major indices, such as the S&P 500 or Dow Jones. Passive investment portfolio managers do not make decisions about which securities to buy and sell.

Over the past twenty years, the trend has shown an increase toward passive investment strategies. Since 1993, there has been a net inflow of dollars into passive mutual funds and exchange-traded funds. Conversely, since 2016 there has been a net outflow of dollars from actively-managed funds.

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