Passive, Active, ... Whatever
Low costs drive superior stock-fund results, not indexing.
It's no secret that actively run mutual funds are unpopular. They have suffered net outflows for three of the past four years. Meanwhile, the combination of index mutual funds and exchange-traded funds has enjoyed positive net sales.
The grim news (for active managers) appears below. The universe consists of all mutual funds and ETFs, save for money market funds and funds of funds. For convenience's sake, I classify all index funds as "passive," although many ETFs hold idiosyncratic portfolios that should properly be regarded as active. But such funds are almost always small and thus immaterial to the overall picture.
John Rekenthaler has a position in the following securities mentioned above: PTTRX. Find out about Morningstar’s editorial policies.