Contrary to popular belief, investors haven’t altogether turned a cold shoulder to equities.They have just gotten more, well, passive about their investments.

Anyone who has been paying attention to U.S. equity fund flows over the past two years knows that, overall, the sales landscape for stock funds has not been good. More investors have been turning their back on equity products and refocusing their attention toward fixed- income funds and alternative asset classes. But, investors haven’t given up entirely on expanding their equity exposure. In fact, if you dig below the headline numbers, you can see that there are two investment categories within the equity universe that have weathered the asset shift: ETFs and passively managed mutual funds. As a whole, equity funds have seen roughly $65 billion in net outflows since the beginning of 2011. While equity ETFs have continued to gain popularity with both institutional and retail investors—attracting net inflows of $117 billion—they have not been able to counteract the massive outflows from equity mutual funds (-$182 billion) over the same period. So, does this imply investors have completely turned their backs on stock mutual funds? Not quite. If you focus solely on passive equity mutual funds, you will see they have attracted an astonishing $93 billion in net inflows for the period, coming in just on the heels of their ETF brethren. The scary number for the industry is that for actively managed equity products: $275 billion in net outflows and counting…