Active Funds Fail to Beat Passive Peers in 2025

Passive investing boom pressures active managers: Morningstar

Active funds underperformed passive peers across much of Europe in 2025 as volatile markets and shifting investor preferences boosted demand for low-cost index strategies, according to Morningstar’s data. The report, which compared active funds with passive counterparts across European, Asian and African Morningstar categories, found European investors rotated away from US equities toward European and

Morningstar: Cheaper active funds are best positioned to perform over the long term

2025 was marked by volatility and European investors shifted from the US to European and emerging-market equities, with a strong move toward passive investments. Morningstar today published its European Active/Passive Barometer Full-Year 2025 report, which measures the performance of active funds against passive peers in their respective European, Asian, and African Morningstar Categories. “Irrespective of asset class, a fund’s survival is close…

Active Funds Fail to Beat Passive Peers in 2025

The firm’s Active/Passive Barometer has shown a declining rate of success for actively managed mutual funds and ETFs.