Founder of the Vanguard group, John C. Bogle once said that the most successful innovation in modern financial history was the first index fund.
It seems investors agree, as at the global level today the largest mutual fund is the Vanguard Total Stock Market Index Fund. What’s more, is that as of December 2024, passive funds in the United States passed active funds in terms of AUM.
In India as well, passives are gaining momentum. India currently has an AUM of Rs. 11.55 lakh crore in passives as of April 2025. This means that passive funds make up 17% of the total mutual fund industry AUM.
Let us get a glimpse of global trends in passive funds:
USA and Canada
According to the figures released by Investment Company Institute (ICI) for March 2025, passive mutual funds have USD 15.96 trillion in AUM compared to active funds which have USD 15.38 trillion. This means that passive funds have beaten active funds in terms of AUM, bringing in 51% of the AUM.
In terms of investor flows, in March 2025 alone, long term active funds saw net outflows of USD 61.25 billion, with investors pulling money out of actively managed strategies in the USA. On the other hand, index funds witnessed net inflows of USD 49.84 billion, continuing the passives trend in the U.S.
According to a PWC report, ETFs in 2024 in the USA reached an AUM of USD 10.3 trillion.
According to the Securities and Investment Management Association (SIMA), in Canada, ETF AUM reached $518 billion by the end of 2024, representing 19% of total mutual fund AUM, which is currently $2.242 trillion.
However, according to TD Securities, a financial services firm, in terms of inflows in ETFs, passive ETFs brought in 58% of the total flows. In fact, 2024 had ETFs receiving some of the highest flows in Canadian history.
Europe
According to data from Morningstar UK, the percentage of the share of long-term passive funds in Europe has been increasing since 2015. Long-term passive funds had a share of 13.7% in December 2015, which has increased to 29.6% as of December 2024.
In terms of flows, long-term index funds beat actively managed funds as of December 2024, bringing in EUR 307.6 billion compared to EUR 150.5 billion.
China and Asia – Pacific
In China, the passive revolution has been a standout. According to a report from Bloomberg, the passive industry passed the active industry for the first time ever in the third quarter of 2024 in terms of AUM. Passive funds had AUM of 3.16 trillion-yuan, passing actives which had 2.84 trillion yuan.
As it can be seen, the passives revolution is across the globe. To explore this ever-evolving world, join us on May 23 at Cafemutual Passives Conference at Taj Santacruz, Mumbai.
To know more about Cafemutual Passives Conference 2025, click here!
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