(Last Word) Passively managed funds produce higher rates of return for investors than actively managed funds because

Question

Quizplus · Accepted Answer

Passively managed funds typically have lower trading and management costs than actively managed funds, which allows them to produce higher rates of return for investors. Actively managed funds also tend to have higher turnover rates, which can lead to higher taxes and therefore lower returns for investors. Risk and asset allocation strategies vary between passive and active management and are not the main factor in determining which produces higher returns.

(Last Word) Passively Managed Funds Produce Higher Rates of Return