The majority of actively managed mutual funds failed to outperform the market index over the last 10 years, according to a new study by InvestingNerd.
Only 24 percent of professional investors were able to beat the market over this period. Because of high fees paid to professional fund managers, most investors won't outperform passive indexes, the study found.
Despite studies showing this, investors continue to pay for active asset management, preferring to try to pick a winner rather than playing it safe. As of Dec. 31, 2012, there was more than $7 trillion invested in more than 23,000 actively managed mutual funds and exchanged-traded funds, almost three times the $2.5 trillion invested in passive funds.
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