BlackRock has doubled inflows into its index tracker funds in the last 12 months to £1.35bn.
Speaking at the Money Marketing Investment Summit last week, managing director Mark Elliott said £800m has flowed into the funds in the last six months, during which time the firm has launched three tracker funds, bringing the total to 12.
He said: “We are seeing more demand for passive funds as people become aware that simple, cheap solutions are effective.”
The IMA recorded inflows into passive funds of £1.2bn in 2010, compared to £406m in 2009.In the first quarter of this year, inflows totalled £824m compared with £130m in Q1 2010.
Eliott said competition is increasingly fierce in the passive sector and scale is crucial to differentiate firms.
He added that as demand for passive products grows, passive offerings will broaden out into more specialist indices, such as the smaller companies index.