Passive Funds Outperform Active in Most Categories, Despite Top-Quartile Managers

Passive investment strategies outperformed active funds across most Australian and global categories, according to Morningstar's Australia Active/Passive Barometer. Passive funds maintained higher success and survivorship rates in most sectors. However, top-quartile active managers in eight of nine categories generated positive excess returns over 10 years, highlighting the importance of manager selection. Certain categories, such as Australia mid/small-blend and global bonds, favored active management.