US Equities: Does Active or Passive Investing Pay?

Morningstar's chart looks at one-, five-, and 10-year periods for U.S. equity funds. In the long run, active funds underperform their passive counterparts due to higher fees

Tim Strauts 3 February, 2016 | 3:41PM
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Tim Strauts: In today's chart, we are going to examine Morningstar's Active/Passive Barometer. It is unique in the pragmatic way it measures active-manager success. For instance, it compares active managers' returns against a composite made up of relevant passive index funds. We believe this is a superior approach because it reflects the actual net-of-fee performance of passive funds rather than an index, which isn't investable.

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