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(Bloomberg) –If stock pickers are becoming an endangeredspecies, this may be the latest sign. Investors now have more money in large-capequity funds tracking indexes than in actively run funds of thesame type.

The lines crossed in the fourth quarter, according to data fromMorningstar Inc. Passive mutual funds, exchange-traded funds andso-called smart beta funds in the sector held $2.93 trillion inassets as of Dec. 31, compared with $2.84 trillion on the activeside.

The gap has been narrowing for years as investors pour moneyinto low-fee index funds while higher-cost stock-pickers struggleto consistently beat markets. Based on the flow trends, passivefunds tracking U.S. stocks of all sizes could pass up their activerivals this year.

Only 24 percent of all active funds — those holding stocks,bonds or real estate — outperformed their average passive rivalover the 10 years through December, according to a Morningstaranalysis of 4,600 U.S. funds with $12.8 trillion.

Long-term success rates were generally higher amongforeign-stock funds and bond funds and lowest among U.S. large-capfunds, the report by Ben Johnson and Adam McCullough found.

The trend probably means fewer jobs for stock-pickers,McCullough said in a telephone interview. “But the net benefit toall investors of more efficient markets and lower costs outweighsthe job losses for stock picking.”

Despite the change in dominance, passive funds are far fromcontrolling the overall stock market. The market capitalization ofthe Russell 1000 Index is about $26.7 trillion, according to datacompiled by Bloomberg.

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