Investors may have voted the Satrix Top 40 as their favourite exchange traded fund (ETF), but the passively managed fund in which they have invested the most is Nedgroup Investments' multi-asset Core Diversified Fund. The unit trust fund recorded 44% growth last year and now has R10.8bn under management. This makes it the largest passively managed fund according to Nedgroup, which compiled a list of the top 10 largest funds for its annual Core Chartbook publication.The Core Diversified Fund, which is a month short of having a 10-year performance history, has delivered returns of 10.6% a year for investors since inception, according to Nedgroup. This, it says, is in line with its target of inflation plus 5% and with returns delivered by the most popular actively managed balanced funds - the Allan Gray Balanced Fund (10.1% a year from September 1 2009 to July 31 2019 according to Morningstar), the Coronation Balanced Fund (10.6%), the Foord Balanced Fund (10%), the Investec Opportunity Fund (9.9%) and the Prudential Balanced (10.9%). The Core Chartbook records the growth of what Nedgroup calls rules-based investments globally and in SA. These funds include traditional passive investments that track indices in which securities such as shares, bonds and listed property are weighted according to their size (market-weighted); smart beta or enhanced strategy funds that track indices that use factors such as dividend yield to determine the weightings of the shares; and multi-asset investments that include asset allocation. The Core Diversified Fund is managed for Nedgroup by Taquanta and tracks customised indices in five domestic and five offshore asset classes represented by market-weighted indices. The allocations to each asset class are strategic or static.Jannie Leach, the head of core investments at Nedgroup Investments, says the fund aims to deliver returns in line with the market, but the indices are capped, so exposure to SA's heavyweights such as Naspers is limited. The fund has grown rapidly since being made available to individual investors in 2014. A number of independent financial advisers are now using the fund together with other popular actively managed balanced funds to reduce investors' fees, Leach says. The Core Diversified Fund has a total investment charge of 0.57% a year while the other popular balanced funds have annual fees ranging from 1.3% to 1.8%. The fund has also been listed as an option for a number of umbrella retirement funds, Leach says. The Satrix's Swix Top 40 Index Fund invests only in the top 40 shares on the JSE. This was the largest passively managed fund (with R10bn invested) in 2017. It is now the second-largest fund with R9.5bn at the end of July.Another popular equity index-tracking fund that was chosen as the people's choice by about 700 investors at the second annual South African Listed Tracker Awards earlier this year, the Satrix Top 40, also lost ground last year. From being the second-largest passive fund in 2017, it slipped to third place at the end of last year and is still there with R8.6bn at the end of July. Leach says the trend across all collective investment schemes is lower flows into domestic equity funds. But multi-asset and global equity collective investment schemes, including those that are passively managed, have been favourites.Half of all the money invested in unit trusts and ETFs is in multi-asset funds, because many of these are suitable for retirement savings. While rules-based multi-asset funds are growing steadily, they still make up only 2% of the multi-asset category. Leach says over the next 10 years it is likely that this 2% will grow to over 20%, in line with trends globally.Among the rules-based funds that enjoyed strong growth in assets under management last year and are among the 10 largest in SA are one of Nedgroup's other multi-asset funds, the Nedgroup Core Guarded Fund - which keeps its equity exposure below 40% of the fund - and Satrix's Balanced Index Fund. 10X's High Equity Fund also entered the top 10 this year when it transferred its life assets to its unit trust.The Satrix Balanced Fund also has a strategic allocation to each asset class and the local equity part of the fund is managed by a smart beta index. The fund has returned on average 6.68% a year over the past five years since its 2013 launch. When it comes to equities, passively managed funds make up 11% and 13% of the local and foreign equity unit trust categories. Among the 10 biggest rules-based funds at the end of last year were four global equity funds: the Sygnia Itrix MSCI World ETF, the Sygnia Skeleton International Equity Fund of Funds, the Sygnia MSCI USA ETF and the Satrix MSCI World Equity Index Feeder Fund. ..