Last year, the pace of market erosion by passive investing actually slowed down. Data shows that the overall share of passive funds only grew by 1.4% last year, ultimately reaching a 54% market share. Looking at specific asset classes, passive products in equities accounted for 60%, while fixed income only made up 40%.

Interestingly, there are two main reasons for the slowdown in passive erosion: first, a bull market created better performance opportunities for active managers; second, active management gained significant growth in ETF products. In other words, the market has not fully shifted to passive, and active management is still fighting to reclaim its territory in niche areas. This reflects an ongoing adjustment in the investment ecosystem, with various product types seeking their own position.