Passive equity strategies have seen massive inflows over the last decade, in part owing to active management’s struggles. But a closer look at the story within the story suggests that leaving active out of the equation could be leaving money on the table.

First, a little history on how we got here.

In the early 1980s, the baby boomer generation started to enter its peak earning years—and stepped into the biggest equity bull market in history. From 1981 through 1999, the S&P 500 Index delivered annualized returns of more than 17% (Display). More earnings and a wealth-building rally created a winning formula for investors.

But as the oldest boomers began to approach their retirement years, they were hit with two major market crises—the bursting of the tech bubble and the global financial crisis. This challenging period from 2000 through 2008 left investors reeling, with their wealth eroding just as retirement was approaching.

As a result, many baby boomers took a fresh look at how they thought about investing. One of the prevailing thoughts: “Active management didn’t help me defend in the downturns.”

That line of thinking sparked a broader assessment of active management’s struggles. With that in mind, investors sent a wave of money into passive strategies.