Date of Completion

Spring 4-28-2021

Thesis Advisor(s)

Liping Qiu; Alexander Amati

Honors Major



Finance and Financial Management


The study investigates the plausibility of an active to passive transition, the impact of crises on the potential transition, and the performance-flow relationship of both active and passive investment products, which includes US equity, open-end and ETF, funds. The analysis compares active and passive funds through the lens of fund flows, absolute returns, and risk-adjusted returns. The study shows that there seemed to be an active to passive transition from 2007 – 2019 and that 2020 – 2021 exhibits measures that could describe changes in the active to passive narrative. A performance-flow relationship exists across both active and passive funds. Passive funds see larger fund inflows for better returns except during crises (2007 – 2009, 2020 – 2021). Active funds demonstrate higher performance sensitivities to all absolute and risk-adjusted performance measures, especially during crises and mixed during periods of normalcy.