Active Funds Fail the Test in 2020

Morningstar's survey of 21,000 funds reveals that half of active funds beat their passive peers in a volatile period for world markets

James Gard 31 March, 2021 | 1:08PM
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Morningstar Europe Active Passive Barometer

Active fund managers failed to use 2020’s stock market volatility to their advantage, according to the latest research from Morningstar. Only half of active funds managed to outperform their passive rivals during the sell-off and recovery of 2020.

The figures are even worse over the long-term, with just 25% of active funds doing better than their tracker counterparts over 10 years. In some categories the success rates have been dire: in US Large-Cap Growth Equity, not a single active fund managed beat its passive counterpart over a 10-year period. It's no wonder then, that so many European investors are ditching active fund managers and using trackers instead. 

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James Gard  is content editor for Morningstar.co.uk

 

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