Writes Richard Henderson in the Financial Times' FundFire.com newsletter: "The Nevada Public Employees' Retirement System (NPERS) has cut a combined $6 billion in mandates from five managers as it adopts a completely passive portfolio for its tradable securities." Nevada, with $35 billion under management, "axed a trio of $800 million active fixed income strategies managed by J.P. Morgan Asset Management, Western Asset Management and Dodge & Cox," FundFire reported, citing Nevada's contracted chief investment officer, Ken Lambert (whose day job is at Peavine Capital). .

The ex-active bond buyers' accounts "will largely move to UBS Global Asset Management, which will manage $4.9 billion in passive fixed income, up from $1.9 billion, and Payden & Rygel, which will manage a similar amount after managing $1.8 billion previously." Their performance will be weighed vs. Barclays Capital U.S. Treasuries Index, instead of the previous Capital Aggregate Bond Index. Nevada has also taken $1.8 billion from two of its passive managers, BlackRock and Mellon Capital Management, and spread it among other passive managers (BlackRock and Mellon still run billions in passive Nevada money.)

"The changes mean the plan's 90% allocations to stocks and bonds are now completely passive. The fund's remaining 10% is held in private equity and real estate," much like the switch Pennsylvania's Montgomery County has made. "This shift comes as more institutions are turning to passive products to save money while enjoying solid returns, pushing up total assets held in passive strategies in recent years.

"At the end of 2014, institutional investors held $3.1 trillion in passive strategies," nearly double the $1.6T at year-end 2010, FundFire added, citing eVestment data. Total "institutional assets held in passive U.S. equity strategies alone have increased to $2.2 trillion at the end of 2014 from $1.03 trillion at the end of 2010, according to the data. And this may just be the beginning. A report from Casey Quirk found a total of $1.8 trillion held in active strategies could move over to passive products and benchmark-agnostic active strategies, like unconstrained bond funds, by 2018."