Active Funds Outperform in Large-Caps Short-Term, Plunge Over 10 Years

Business Standard · stocks

A Morningstar report reveals that active large-cap funds significantly outperform passive funds over shorter periods, with an 87.9% success rate in one year and 86.7% in three years. However, this trend reverses dramatically over the long term, with only 25.8% of active funds beating passive options over a decade. This divergence highlights that investment strategy success varies greatly depending on the time horizon examined. The report analyzed 471 funds, comparing active strategies against actual passive funds and accounting for survivorship.