The Historical Record on Active vs. Passive Mutual Fund Performance

30 Pages Posted: 13 Sep 2018 Last revised: 24 May 2021

See all articles by David Nanigian

David Nanigian

San Diego State University - Fowler College of Business - Finance Department

Date Written: February 19, 2021

Abstract

This study examines the risk-adjusted performance of actively managed mutual funds vs. passively managed mutual funds between 1991 and 2019 and finds that there is no statistically significant difference in performance between the two types of funds when the passively managed funds are compared to competitively priced actively managed funds. The practical implication of this study is that, setting tax considerations aside, as long as investors are cost-conscious in their fund selection process, investing in passively managed funds does not meaningfully improve investor outcomes.

Keywords: Passive investing, Index funds, Actively managed funds, Mutual fund performance, Mutual fund fees, Mutual fund industry competition

JEL Classification: G11, G23

Suggested Citation

Nanigian, David, The Historical Record on Active vs. Passive Mutual Fund Performance (February 19, 2021). 2019 Academic Research Colloquium for Financial Planning and Related Disciplines, Available at SSRN: https://ssrn.com/abstract=3248056 or http://dx.doi.org/10.2139/ssrn.3248056

David Nanigian (Contact Author)

San Diego State University - Fowler College of Business - Finance Department ( email )

5500 Campanile Drive
San Diego, CA 92182-8236
United States
213-545-1036 (Phone)

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