The House Financial Services Subcommittee on Capital Markets held a hearing on the modern investment ecosystem and the strategies available to Americans, focusing on how changes in retail investing, passive products and exchange-traded funds are affecting investor choice. Members framed the discussion around access to investment options suited to different savings goals, while also stressing the need for capital markets that remain competitive, transparent and able to allocate capital efficiently. Witnesses pointed to structural shifts in the market rather than new regulatory actions. Capital Group said the Securities and Exchange Commission’s 2019 ETF Rule helped put active and passive ETFs on a more even footing and that active ETFs are now growing faster and taking share from passive products. Morningstar said costs for active funds have declined, citing an asset-weighted average expense ratio of 0.57% at the end of last year, about 30 basis points lower than a decade earlier, reflecting both fee cuts and investor flows toward cheaper active funds. The Investment Company Institute also used the hearing to support H.R. 3383, the INVEST Act of 2025, saying it would help expand public capital markets and investor opportunities.
U.S. Financial Services Committee2026-06-26
U.S. House Financial Services Committee examines modern investment ecosystem and active versus passive strategies
The U.S. House Financial Services Committee used a Capital Markets Subcommittee hearing to examine how retail investing, passive strategies and ETFs are reshaping investment options for Americans. Witnesses said the Securities and Exchange Commission’s 2019 ETF Rule helped expand active ETFs, while Morningstar said the asset-weighted average expense ratio for active funds fell to 0.57% at the end of last year. Testimony also backed H.R. 3383, the INVEST Act of 2025, as a measure to support public capital markets and investor access.