It was basically a coin flip whether an actively managed mutual fund or ETF outperformed its average passive peer from July 2023 through June 2024. About 51% of active strategies survived and beat the average passive fund in their Morningstar Category over that span, a tick up from their 47% success rate in 2023.
Overall, actively managed funds did little to change their long-term track record. About 29% of them survived and beat their average indexed peer over the decade through June 2024.
The US large-cap market has been particularly challenging for active managers due to its competitiveness and representative indexes. Just 20% of them survived and beat their average passive rival over the decade through June 2024.
All three large-cap categories saw negative median 10-year excess returns for surviving active funds, and the distribution of excess returns skewed negative. That indicates the penalty for picking a poor active fund normally exceeded the reward for picking a good one.
