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The common narrative that passive investing will overtake active management suggests a primarily passive future for investors. However, an analysis of fund assets under management (AUM) data across time and regions offers a starkly different perspective on the future of investment management.<br/>Contrary to popular belief, active management continues to dominate passive investing as measured by worldwide AUM. Even though index fund AUM experienced a 1,500-fold increase since 1989, it still represented only 32% of all fund AUM by the end of 2021. Assertions about the dominance of passive investing are largely based upon a few exceptions—most notably for equity funds in the US Large-Cap Blend category, where index funds contain three times the AUM as their active counterparts. In other regions and across asset classes, index funds are not nearly as prevalent. Generalizations based on US Large-Cap Blend equity funds are misleading.<br/><br/>Looking forward, advances in technology will allow for comprehensive customization of portfolios curated to meet the specific needs and preferences of investors. Passive index funds will be substantially disintermediated by “hyper-managed” solutions that maximize net economic benefits and satisfy client objectives. Active funds are less likely to be unbundled but will need to clearly demonstrate an investment edge to thrive. We see the active versus passive debate becoming irrelevant as hyper-managed accounts (i.e., accounts that can incorporate both active and passive elements) will generally overtake the use of stand-alone pooled investment products.<br/><br/>Leading asset managers will evolve from offering portfolio products to offering portfolio services that develop and implement low-cost, highly customized total portfolio solutions. Successful deployment of hyper-managed accounts by firms will require extensive investment expertise, deep technology resources, and the ability to effectively collaborate with investors. Customiz