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.
Thinking about creating an optimized excerpt featuring a primary keywordPolicy uncertainty feels terrifying, but the academic evidence shows it's a poor guide to what your portfolio will actually do. Here's how to tell the difference between the forecast and the real risk.
Robin Powell
Apr 98 min read
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