Passive eats active

The Vanguard S&P 500 ETF has just become the first ETF in history to reach $1 trillion in assets.
This milestone reflects a much broader trend in the US fund industry: passive investing continues to gain market share from active management.
In 2025, passive funds represented around 55% of US mutual fund and ETF assets. Over the past ten years, passive funds have attracted approximately $9.5 trillion of net inflows, while active funds have seen around $604 billion of net outflows.
These numbers are striking. Investors continue to favour simple, liquid, low-cost and index-based solutions.
There is, however, an important nuance. Passive is increasingly dominating the US fund industry, but it does not yet own the whole equity market. In the US public equity market, direct household ownership still represents around 40%, compared with approximately 10% for active mutual funds.
For active investors, the message is clear: being active is no longer enough. To justify higher fees, active management must be genuinely differentiated, disciplined and value-creating.