A key reason that actively managed funds have lower returns than index funds with a similar level of risk is that:

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Leanna Dougherty

Business

21 February, 20:00

A key reason that actively managed funds have lower returns than index funds with a similar level of risk is that:

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Krista Andrews · Answer 1

Arbitrage reducing the returns of actively managed funds is a key reason that actively managed funds have lower returns than index funds with a similar level of risk

To add, actively managed funds typically have higher fees than passively managed funds.