How to Money · Friday, September 11, 2026
Morningstar data reveals that only 13% of active funds outperformed their index counterparts over a decade, down from 27% in the past year. Hosts argued that the guaranteed risk of higher fees for active funds outweighs the slim chance of outperformance, advocating for index funds as the optimal choice for most long-term investors.
“There's Morningstar data, and they found that 27% of active funds outperformed their index counterparts within the past year. But you stretch that out and you look at over the course of a decade, which, of course, we are long-term investors, that number shrinks from 27% down to 13%.”
“And it just, again, goes... It goes to show that... I don't know, you start asking the question, is it worth the risk, the guaranteed risk of paying more for an actively traded ETF or fund for the chance of perhaps slightly outperforming it?”
“And at the end of the day, the index fund almost always, especially over a long period of time, proves to be the better way to go. And it avoids higher fees and wasting more mental energy.”