Has the strong shift in investor flows from active funds to passive funds unexpectedly contributed to a decline in performance of the former? In her June 2026 paper entitled "Passive Flows, Active Woes: Passive Investing and the Decline of Active Mutual Fund Alpha", Hannah Unterberg studies whether the secular shift from active to passive investing (see the chart below) has depressed active fund performance because outflows force liquidation of active fund holdings. Using holdings and returns for a broad sample of active and passive U.S. equity mutual funds and exchange-traded funds during January 1984 through December 2024, she finds that:
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