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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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Passive investing and market volatility: why the calmest investors aren't the bravest
The investors who stay calmest during market volatility aren't the bravest. They hold passive investing products that don't ask them to make decisions. Research from Morningstar, Vanguard, and academic studies shows that product design, not temperament, explains why passive fund investors trade less, hold longer, and capture more of their returns. UK flow data from the current Iran-driven selloff confirms the pattern in real time.
Robin Powell
Mar 2310 min read
Active management still dominates — and the data proves it
Active fund managers keep warning about passive investing's dangerous rise. But new research covering $784 billion in institutional assets reveals active management still dominates — capturing 97% of all fees paid.
Robin Powell
Jan 216 min read
Active vs passive — a journalist's view
JONATHAN CLEMENTS is one of the best-known names in financial journalism. After starting his career writing glowing profiles of star fund managers, he began to see a pattern: most of them failed to deliver over the long run. Raised and educated in England, Clements moved to the United States after graduating from Cambridge University. His early years at Forbes magazine left him sceptical about active management. Even when a fund manager looked like a sure bet, the success rar
Robin Powell
May 19, 20253 min read
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