Managed mutual funds perform better on average than index funds because stock prices are usually a good predictor of a company's true value.

Question

Quizplus · Accepted Answer

Managed mutual funds do not consistently outperform index funds; numerous studies and data show that over the long term, index funds often have better returns, primarily due to their lower fees and the challenge of consistently beating the market through active management.

Managed Mutual Funds Perform Better on Average Than Index Funds