Active management has become popular again, with more than half of actively managed large-cap mutual funds on track to outperform their benchmarks for the year, according to Goldman Sachs data that is cited in an article in The Wall Street Journal. Active management has been unpopular since the 2008 financial crisis as big tech stocks such as Apple, Amazon and Microsoft monopolized the S&P 500 and investors made easy money through passive investments that tracked the index.

Now, however, investors have made a rapid exit from those tech giants, turning instead to energy and defensive companies that will likely better withstand volatility. But those kinds of companies don’t influence the direction of the wider market as much as powerful tech companies; investors can no longer rely on the “buy and hold” an index fund method of investing. That creates an opportunity for stock pickers, the article contends, especially since the forecast for 2023 is still unclear. If the Fed continues to raise rates as they’ve indicated, that would further lessen the appeal of growth stocks, and Apple, Amazon, and Microsoft have already fallen 25%, 50%, and 30% this year, respectively.

Many strategists say the tech industry’s pain often reverberates throughout the economy, with Michael Kelly of PineBridge Investments telling The Journal that the recession, though widely expected, would “shock people when it happens.” He advised buying energy and long-term growth stocks that could withstand a recession, such as Exxon Mobil, PG&E, and CF Industries, a fertilizer manufacturer, which are up 74%, 31%, and 32% this year, respectively. Given that the S&P 500 is still dominated by the big tech, active strategies are expected to remain popular through next year. However, passive funds still make up 55% of the total assets under management in ETFs and mutual funds in the U.S., which investors have funneled $520 billion into this year while draining $805 billion from actively-managed funds. And investors haven’t given up on those tech giants yet; many point to the prevalence of their products, whose popularity won’t dim any time soon. Head of equity research at Ameriprise Financial Justin Burgin told The Journal, “I know a lot of people that would skip their rent payments to get a new iPhone.”