Brian Levitt, Senior Investment Strategist From 2001-2009, a period marked by two recessions, the rolling monthly 5-year return of the S&P 500 Index ranked, on average, in the 49 th percentile of the Morningstar Large Blend Category. 1 From 2010-2015, a period marked by easy money and zero interest rates, the rank of the rolling monthly 5-year return of the S&P 500 Index steadily climbed into the top decile. Asset flows into index strategies followed. 2 Since the U.S. Federal Reserve (Fed) raised rates in December 2015, the S&P 500 Index has ranked in the 38 th percentile of the Morningstar Large Blend category. For the year ended December 31, 2017, a year in which the Fed raised rates three times, the S&P 500 Index ranked in the 44 th percentile of the category. 3 To me, this evidence epitomizes the cyclical nature of these things but time will ultimately tell. For now there is enough long-term history on the ETF strategies tracking the Morningstar style-box indices to render a reasonable verdict.Consider that the performance of the most widely held ETF strategy tracking the S&P 500 Index since its inception (May 15, 2000) ranks in the 45th percentile. The most widely held ETF strategies tracking the Russell 1000 Value Index and the Russell 1000 Growth Index since their inceptions (May 22, 2000) rank in the 56th percentile and 69th percentile of the Morningstar Large Cap Value and Morningstar Large Cap Growth categories, respectively. The small-cap ETFs tracking the Russell 2000 indices look significantly worse. These returns are middling or worse (Exhibit 2). To be fair, I’ll confess that it is the mid-cap value and mid-cap blend managers who seem to be facing the stiffest competition from passive market-cap-weighted strategies.I know that one blog isn’t necessarily going to change people’s behavior. But I worry when I see cumulative asset flows of $1.1 trillion into passive market-cap strategies and $885 billion out of actively managed strategies.As General Patton said, “If everybody is thinking alike, then somebody isn’t thinking.” An entire generation of investors hasn’t lived through a Fed rate-tightening cycle or a period when overvalued markets undergo a correction (remember, markets were not overvalued in 2008). Others simply don’t remember. As the Fed’s tightening cycle progresses and valuations become increasingly elevated, it feels like the shift toward the outperformance of active-management strategies or alternatives to market-capitalization-weighting methodologies is already happening. My salary may partially depend on it, but that doesn’t mean that I am necessarily wrong. 1Source: Morningstar Direct, as of 12/31/17. 2Source: Morningstar Direct, as of 12/31/17. 3Sources: Bloomberg and Morningstar Direct, as of 12/31/17.Mutual funds and exchange traded funds are subject to market risk and volatility. Shares may gain or lose value.These views represent the opinions of OppenheimerFunds, Inc. and are not intended as investment advice or to predict or depict the performance of any investment. These views are as of the publication date, and are subject to change based on subsequent developments. Carefully consider fund investment objectives, risks, charges, and expenses. Visit oppenheimerfunds.com or call your advisor for a prospectus with this and other fund information. Read it carefully before investing.OppenheimerFunds is not affiliated with Advisorpedia.©2018 OppenheimerFunds Distributor, Inc.