Active Strategies Struggle to Outperform Passive
Active strategies—whether in mutual funds, ETF or other wrappers—continue to draw a healthy volume of fund flows, despite a majority of such vehicles failing to outperform their passive counterparts. In addition, when selecting active strategies, funds with lower fees have tended to outperform. That’s according to a recent analysis by Morningstar in its semiannual U.S. Active/Passive Barometer Report.
In all, the report found that only 42% of active strategies survived and outperformed their passive peers. However, performance did vary by asset type. (That mark was consistent with 2023’s performance.) Active equities funds—especially large and mid-cap strategies—struggled the most to beat passive options. In all, just 37% of…
