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One of the more enduring trends we’ve seen across markets has been the shift from active managers into passive — this is a phenomenon that has been relentless across both equities and fixed income (see Figure 1). At the end of 2020, passive investment accounted for about 50% of total equity investment (based on the US fund universe), but only about 35% of total fixed income. The shift to fixed income indexing has lagged equities historically, and that continues to be the case, with slower adoption being something that can be partly attributed to it being generally harder to replicate fixed income indices given the large number of securities. However, we believe that relative performance (after fee considerations) has been the main reason for the comparatively slower move to indexing in fixed income.