What’s at stake: Morningstar research shows that active funds perform better than passive funds in inefficient markets such as the small cap sector.
Background: While the average performance of active funds is better, there are bigger differences, with some funds well below the average.
Main players: Morningstar, Zunjar Sanzgiri, active fund managers, passive fund managers.
Active investment strategies are more likely to perform better in inefficient Australian markets in sectors such as mid and small cap shares and even large value equities but, when it comes to efficient markets with representative indices, low-cost passive funds are dominant performers.
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