Passive index fund inflows reached a record $120 billion in the first quarter of 2026, continuing a multi-year trend of investors shifting away from actively managed strategies. Total assets in US index funds now exceed $12 trillion, representing roughly 55% of all domestic equity fund assets.
The growth has been concentrated in broad market and total stock market index funds, though thematic index products tracking AI, clean energy, and healthcare innovation have also attracted substantial capital.
Active fund managers argue that the current market environment, with increased volatility and sector dispersion, should favor stock-picking strategies, but flow data suggests investors remain unconvinced.
