Investors poured a record $180 billion into index funds and ETFs during the first quarter, continuing the long-term shift from actively managed to passive investment strategies.
Low fees, tax efficiency, and consistent long-term performance relative to benchmarks continue to drive the passive preference. Target-date funds in 401(k) plans also contribute to the trend.
Financial advisors increasingly build portfolios around low-cost index cores while using active management selectively for specific objectives like tax loss harvesting or factor exposure.
