The MFS Active Management Sentiment Survey took the pulse of 845 investors worldwide, including 220 institutional investors worldwide and 25 Australian institutions.
Of the Australian respondents, almost 75 per cent of total assets under management is invested in actively managed strategies, found the survey.
MFS managing director of Australian institutional Marian Poirier said that although passive strategies have gained traction in recent years, active management remains an "integral piece of the puzzle" for Australian investors.
"And when the current bull market in equities and bonds comes to an end, the need for capital preservation and risk management will be elevated," Ms Poirier said.
Three-quarters of Australian investors are at least "somewhat concerned" about a major drop in equity markets over the next 12 months, and 56 per cent of respondents listed "protecting capital" as a priority.
"Moreover, 56 per cent maintain that active management offers superior risk management controls over passive investment options, and almost half believe actively managed strategies are the best way to mitigate downside risk in a portfolio during a bear market. Evidence supports their conviction," said MFS.
The survey also found that Australian investors are concerned about market volatility and an extended period of lower returns, said Ms Poirier.
"At the same time, they are increasingly steering flows towards passive products that have no ability to mitigate losses," she said.
"If we are indeed entering a lower return environment, those active managers who can generate alpha and manage risk on the downside will differentiate themselves, but only if investors are willing to give them time."
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