globalen
It’s not about active or passive, but about costs

It’s not about active or passive, but about costs

06-03-2019 | From the field
What if costs were the real issue in the heated active versus passive debate? This study 1 finds that much of the historical outperformance of passively managed funds relative to actively managed funds is simply a result of expenses. In today’s mutual fund market, however, there are many actively managed funds with expenses that are comparable to those of passively managed funds.
  • David Blitz
    David
    Blitz
    Head of Quant Research

The study goes on to show that when passively managed funds are compared to these competitively priced actively managed funds, there is no economically meaningful difference in performance between active and passive.

The author concludes that as long as investors are cost conscious in their fund selection process, the active versus passive choice is basically irrelevant. We think these results make a lot of sense, and that investors should indeed focus on costs instead of taking a dogmatic stance in the highly polarized active versus passive debate.

Stay informed on Quant investing with monthly mail updates
Stay informed on Quant investing with monthly mail updates
Subscribe
From the field
From the field

Our researchers publish many whitepapers based on their own empirical studies; they also follow quantitative research done by others.

Read all articles
Subjects related to this article are:

Disclaimer

The information contained in the website is solely intended for professional investors. Some funds shown on this website fall outside the scope of the Dutch Act on the Financial Supervision (Wet op het financieel toezicht) and therefore do not (need to) have a license from the Authority for the Financial Markets (AFM).

The funds shown on this website may not be available in your country. Please select your country website (top right corner) to view the products that are available in your country.

Neither information nor any opinion expressed on the website constitutes a solicitation, an offer or a recommendation to buy, sell or dispose of any investment, to engage in any other transaction or to provide any investment advice or service. An investment in a Robeco product should only be made after reading the related legal documents such as management regulations, prospectuses, annual and semi-annual reports, which can be all be obtained free of charge at this website and at the Robeco offices in each country where Robeco has a presence.

By clicking Proceed I confirm that I am a professional investor and that I have read, understood and accept the terms of use for this website.

Decline