Is passive investing headed for a day of reckoning? – Minneapolis Star Tribune

The investing public has fallen in love with passive investment strategies that aim to match average stock market returns through index funds and exchange traded funds (ETF), as more investors question the value of paying higher fees for actively managed mutual funds.

Data provided by the Washington, D.C.-based Investment Company Institute show that from 2014 to March 2017, actively traded mutual funds saw $773 million in assets pulled out of accounts, while investors funneled a total of $596 million into index funds and ETFs.

“The belief in either of the two systems — active vs. passive management — is almost the equivalent to a religious debate,” said Jim Meredith, of the Hefren Tillotson financial planning firm in Pittsburgh.