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Why active funds underperform even when the manager picks well

The managers running the biggest active funds picked stocks that beat the market in 2025 — and most still lagged their benchmark. A Morningstar do-nothing experiment and a body of academic research explain why active funds underperform even when the picking is good: skilled buying undone by poor selling, the hidden cost of trading, and the incentives that keep managers churning. The UK evidence points the same way.

Robin Powell

News headlines about investment platform fees from Financial Times, MoneyWeek and Hargreaves Lansdown following HL's 2026 fee changes

Investment platform fees explained: how to avoid overpaying

Investment platform fees vary wildly — and small differences compound into serious money over time. Here's how to work out what you're really paying and whether it's time to switch.

Robin Powell

Jan 2810 min read

Couple reviewing investment platform design on laptop, discussing fund fees and portfolio choices at home. Investment platform design makes a big difference to the sort of funds they choose, new research shows.

Investment platform design: how making fees more visible changes investor behaviour

Investment platform design significantly influences investor behaviour, new eye-tracking research reveals. Simple changes like larger fonts for fund fees led participants to allocate 11.2% more to lower-cost options. The study shows how visual prominence affects investment choices, suggesting platforms could improve outcomes through better interface design without regulatory changes.

TEBI

Jul 21, 20255 min read

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