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Active vs. Passive Funds

Crews Bank & Trust Wealth Management Services Jun 10, 2022
chart shows annual net flows into passive funds (in purple) vs. active funds (in orange), and their dominance for the last 11 years.

Contents

Today’s chart from Morningstar shows annual net flows into passive funds (in purple) vs. active funds (in orange), and their dominance for the last 11 years.

At this point, if you still have active funds, you have to ask yourself, “Why?”

We do not use active funds, since they:

  1. Cost on average 5x more.
  2. Underperform passive 93% of the time.
  3. Are less tax efficient.
  4. Carry additional risks due to their lack of transparency and propensity for style drift.
Chart of the Day Managing your Wealth

About the Author

Crews Bank & Trust Wealth Management Services
Crews Bank & Trust Wealth Management Services

Experienced professionals from our wealth management services team can help you achieve a bright financial future through investment strategies tailored to you. We’ll show you all of the options available and help you choose the ones best suited to you. We’ll provide high-quality, personal service as we work toward your goals together. Our Portfolio Managers do not receive commissions on trades; our recommendations of investments are based solely on your best interests.

Investments are not a deposit or other obligation of, or guaranteed by, the bank, are not FDIC insured, not insured by any federal government agency, and are subject to investment risks, including possible loss of principal.

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