Research by hedge Funds finds that mutual funds with low expenses and higher manager ownership typically outperform . The comprehensive study of Morningstar ’s database found that the gap between active and passive clearly narrows over a period of 20 years . Overall , active funds beat the index 35 % of the time , however , when the universe is open to investors with low fees and high manager ownership active funds beat the index 40 % of the time .
Research by American Funds finds that mutual funds with low expenses and higher manager ownership typically outperform. The comprehensive study of Morningstar’s database found that the gap between active and passive clearly narrows over a period of 20 years. Overall, active funds beat the index 35% of the time, however, when the universe is narrowed to funds with low fees and high manager ownership active funds beat the index 55% of the time.