In comparing actively managed mutual funds with those funds that simply buy and hold a large market portfolio (index funds),we would expect that

Question

Quizplus · Accepted Answer

Research has consistently shown that index funds outperform actively managed funds on average over the long term due to lower expenses and less turnover. Actively managed funds typically have higher fees and expenses, which can significantly reduce returns. In addition, index funds provide broad diversification, which can lower risk and provide more consistent returns. While there may be some instances where actively managed funds outperform index funds, these are generally exceptions rather than the rule. Therefore, it's best to choose index funds for long-term investing.

In Comparing Actively Managed Mutual Funds with Those Funds That