Question

Actively managed mutual funds mostly outperform those that merely track an index true or false

Answer 1

The statement is false. Unfortunately, evidence that actively managed funds can consistently outperform their relevant index is difficult to find. It's even more challenging for an individual investor to identify which actively managed fund will outperform the index in a given year.

Yes, you may be able to beat the market, but with investment fees, taxes, and human emotion working against you, you're more likely to do so through luck than skill. If you can merely match the S&P 500, minus a small fee, you'll be doing better than most investors.

Mutual funds are actively managed by an investment professional, while index funds are more passive. Mutual funds come with much higher fees than index funds, which can cut into your potential gains.

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Answer 2

Actively managed mutual funds may not outperform those that merely track an index. The given statement is a false statement.

Finding evidence supporting actively managed funds consistently outperforming their relevant index is difficult. An individual investor can see it even more challenging to identify which actively managed fund will outperform the index in a given year.

Actively managed funds are at a disadvantage over an index funds. This is because of the expanse issue that actively managed mutual funds underperform their index.

The best fund type depends on circumstances and objectives. It has been observed that there are good active managers, but finding such managers in advance of their outperformance is difficult.

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