Active managers must be better...

The majority of the world is still active

Active strategies attract more investor money than passive – there’s no surprise there.  According to an April 2015 Morningstar report into US domestic, sector and international equity funds, 62% of AUM is actively managed and 38% passively managed. 
The surprise, however, is how fast the gap is narrowing between investors choosing passive over active.  In the year to 31 March 2015 Morningstar recorded massive inflows into passive US funds and huge outflows from active:

Strategy	1 year flows (US$)
Active	-$80 billion
Passive	+ $352 billion

If US flows into passive and out of active continue at the current rate, then passive will become larger than active within about 5 years.  (Just to be clear, we’re not suggesting flows of this magnitude will continue – it merely illustrates the scale of the current move from active to passive).

Regardless of how investors feel about passive or active management, it is not in anyone’s interest for passive to dominate – it would be a weird (and inefficient) market if everyone was index tracking.  Presumably the inefficiency of such a market would also open up opportunities for active managers to succeed.