Passive fund flows dropped by more than 62 percent last month, according to the latest data from the folks at a publicly traded investment research company.

This article draws from Morningstar Direct data on January 2025 open-end mutual fund and ETF flows, excluding money market funds and funds of funds. (The data also excludes other asset management products, like CITs and separate accounts.***) More specifically, this article focuses on the 154 firms (up by 15 year-over-year from January 2024) that offer passively managed long-term mutual funds or ETFs.

Vanguard regained the lead last month, thanks to an estimated $30.762 billion in net January 2025 passive inflows, down by $9 billion month-over-month from December 2024 and down by $74 million Y/Y from January 2024. Other big January 2025 passive inflows winners included: BlackRock (including iShares), $10.563 billion (down by $33.384 billion M/M, up by $7.397 billion Y/Y); Fidelity, $7.011 billion (down by $8.413 billion M/M, down by $6.169 billion Y/Y); Invesco, $6.822 billion (down by $123 million M/M, down by $4.544 billion Y/Y); and Schwab, $3.869 billion (down by $4.829 billion M/M, up by $756 million Y/Y).

On the flip side, State Street's SSGA took the outflows lead last month, thanks to an estimated $12.47 billion in net January 2025 passive outflows, a $28.468-billion net flows drop M/M from December 2024 and down by $4.933 billion Y/Y from January 2024. Other big January 2025 passive outflows sufferers included: Rafferty's Direxion, $1.77 billion (up by $1.187 billion M/M, a $2.137-billion net flows drop Y/Y); VanEck, $1.019 billion (up by $880 million M/M, a $2.234-billion net flows drop Y/Y); ProShares and ProFunds, $820 million (up by $117 million M/M, down by $2.272 billion Y/Y); and Pacer, $567 million (up by $374 million M/M, a $2.667 billion net flows drop Y/Y).

Overall, passive funds brought in a combined $47.966 billion in net inflows in January 2025, down by $79.431 billion M/M but up by $9.587 billion Y/Y. 51.9 percent (80) of passive fund families brought in net passive inflows in January 2025, down M/M from 57.1 percent but up Y/Y from 43.2 percent.

***This caveat is particularly important for the largest fund firms, many of which are big players in the 401(k) business, where collective investment trusts (CITs) and institutional separate accounts are commonly used alternatives to traditional mutual funds. 

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