While the equities market is making new highs, investors have increasingly turned to passive open-end strategies, along with index-based exchange traded funds, over active mutual funds to gain exposure to the record run.

S&P 500 Index mutual funds attracted $3.0 billion in net inflows in June, writes Todd Rosenbluth, S&P Global Market Intelligence Director of ETF & Mutual Fund Research, in a research note.

Related: ETFs Gain Ground as Advisors Look to Passive Beta-Index Strategies

Meanwhile, the actively managed U.S. large-cap core group experienced $5.1 billion in net redemptions – the active U.S. large-cap group are comparable to the S&P 500, except the active managers have more leeway in the companies and stock weights they may invest in.

Moreover, active funds typically come with much higher expense ratios than passively managed S&P 500 index products, which just simply replicate the benchmark.

According to the Investment Company Institute, active equity funds had an average 0.68% expense ratio. In contrast, the average non-leveraged, traditional beta-index ETF has a 0.51% expense ratio, with the cheapest options only costing investors a low fee of 0.03%.

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