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.
A new study shows how equity duration reshaped markets after 1945, making stock-picking harder and strengthening the case for evidence-based investing.
Robin Powell
Sep 14, 20256 min read
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