Why Passive Investing Is Taking Over Global Markets #shorts

Added: 2026-05-22

[00:00:00]the largest segment which is growing, which is after passives, is actually quantitative investing. Right. Okay. And that's the reason if you see, let me just give you some data points here.

[00:00:11]Last year, 2025 calendar year, there was close to a trillion dollars in the US.

[00:00:17]All of that went to ETFs. And discretionary funds, which are actually actively managed, that lost around 200 billion dollars. What is more than 50% which is passives? And the reason I'm saying passives is because passive is the simplest way of quant, right?

[00:00:31]There's no person who's sitting and taking decisions out there. It's rules based. It's rules based, right? So, it's the simplest form of quant.

[00:00:38]And there is a reason why structurally money is moving to passives because what investors are finding is that most active funds are finding it difficult to outperform the benchmark. And hence, if you see, probably in 2010, which is, let's say, around 15, 16 years back, the percentage of passives was closer to 16, 17%.

[00:01:00]So, 16, 17% has now grown to more than 50%.