Has passive bond investing been a smart choice?

UK asset class flows 2022 (£bn) Source: Refinitiv Lipper This is well illustrated by UK net fund flows over 2022. The most obvious thing from even a cursory glance at the above graph is that, while it was a bad year for risk assets, passive bond funds have fared rather better. While their active equivalents suffered redemptions of more than £20bn, passive mutual bond funds took £11.6bn, and bond ETFs netted £6.2bn. Cheap and liquid There are a few likely reasons for this. One, of course, is cost: passives are much cheaper. Within the Lipper Fund Classifications on table 1 (of which...