"The study by Morningstar Inc. found that, over the past three years, while about half of actively managed funds outperformed their respective Morningstar indexes -- which cover the nine different Morningstar investment styles -- only 37% did on a risk-, size- and style-adjusted basis. The numbers are similar for five and 10-year returns.Gee, we just talked about this today in class.
'It's not enough to beat an index in a way that [assumes more risk],' said Travis Pascavis, director of equity indexes at Morningstar. A riskier fund should provide greater returns, he added"
HT to KimSnider the author of the Family CFO book we used last year in Finance 402.