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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
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Is your fund's performance statistically significant?
Some funds seem to outperform the market, but appearances can be deceptive. Before trusting those results, investors should ask whether a...

Robin Powell
Mar 17, 20253 min read


Fees are the most reliable predictor of future returns
The less you pay to invest, the better your future returns are likely to be. That’s the key finding of new research from Morningstar, as...

Robin Powell
Feb 7, 20253 min read


The role of concentration in fund performance
By LARRY SWEDROE In theory, a manager with skill has more dollars allocated to their best ideas — the returns of portfolios consisting of...

Robin Powell
Aug 5, 20224 min read
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