Moody’s – Inflows To Passive Funds No Temporary Trend

There is a movement, a trend taking place and it “is not temporary,” a Moody’s Investor Service report observes. This isn’t a political movement that jeers at a political convention over mention of the nomination process victor. This movement is going to “accelerate.” Unlike the factions in politics, this movement from active to passive investing will lead to transformational change in the investment industry.

Trend from active to passive started in 2000, was masked by stock market appreciation

Real demand for active equity mutual funds saw its heyday in 2000, just prior to the “Tech Wreck” of 2001 that witnessed an unsustainable bubble burst.

In a July 25 report titled...