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.
Through 2026, retail investors in semi-liquid private credit funds tested their promised liquidity — and lost. New research reveals why the quarterly gates designed to prevent panic actually create it: because meeting redemptions imposes costs on those who stay, everyone has an incentive to run first.
Robin Powell
15 hours ago8 min read
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