Investors pulled $57.4 billion from actively-managed funds in November, the biggest such withdrawal for two years, according to Morningstar.
The active outflows, combined with investors putting $55.9 billion into passive funds during the same time, means that the latter continues to take market share from active funds.
Overall active funds' market share fell from 64.1% to 61.5%. In just equities, the gap is even closer now with passive funds' market share hitting 48.1% at the end of November, up from 44.6% a year ago.
The month was active funds' worst for flows since November 2016 when investors pulled about $65 billion.
Within active funds, US equity was the worst hit category with investors pulling $18.3 billion, with taxable bond funds the next worst hit with $16.2 billion leaving over the month.
Across both active and passive funds, bond investors continued to dial down risk, with the most money going into money market funds ($78.7 billion) and ultra-short bond funds ($13.2 billion).
Taxable bond funds, both active and passive, had their second month of consecutive outflows, with intermediate bond funds the worst hit as they suffered $8.2 billion of outflows.
Despite continued volatility, equity investors were not as cautious as their fixed income counterparts. US equity categories had inflows of $11.6 billion, while international equity funds took in $8.5 billion. This broke down as $18.2 billion in outflows for active funds and $29.9 billion inflows for passives.
iShares surges ahead
The biggest beneficiary of the shift to passive for November was iShares, which surged ahead of Vanguard, taking in $25.3 billion, the firm's highest inflows in 10 years.
The iShares Core MSCI Emerging Markets IEMG took in $3.3 billion, the iShares 1-3 Year Treasury Bond SHY won $2.4 billion and the iShares Edge MSCI Min Vol USA USMV pulled in $1.9 billion.
Vanguard trailed behind iShares with $10.6 billion of inflows. State Street, BlackRock and Fidelity had inflows of $5.9 billion, $5.1 billion and $3.8 billion, respectively.
Franklin Templeton led monthly outflows with $2.9 billion, followed by Pimco at $2.8 billion and Oakmark at $2.6 billion.
