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.
Most fund manager AI systems operate on autopilot, closely tracking the index while charging premium fees for active management. If your portfolio is essentially running itself, why are you paying someone to sit in the cockpit?
Robin Powell
Apr 209 min read
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