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Active Funds Struggle: Only 38% Beat Benchmarks in 2025

2/25/2026

43 7 Full Breakdown

Summary

Story summary

In 2025, the share of active funds beating index-based benchmarks fell to 38% from 42% in 2024.
Diversified emerging-market funds outperformed passive peers 64% of the time.
Actively managed real estate funds outperformed passive peers only 12% of the time.
Financial advisors recommend using passive funds for core market exposure and active funds in less efficient markets, noting that low fees significantly impact long-term investment growth.

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Story summary

In 2025, the share of active funds beating index-based benchmarks fell to 38% from 42% in 2024.
Diversified emerging-market funds outperformed passive peers 64% of the time.
Actively managed real estate funds outperformed passive peers only 12% of the time.
Financial advisors recommend using passive funds for core market exposure and active funds in less efficient markets, noting that low fees significantly impact long-term investment growth.