EM Insight: Active Fund Managers Lose Out to ETFs, Again

The video discusses the performance of active and passive funds in the stock market, highlighting that passive funds have outperformed active ones in recent years. Despite expectations that active funds would excel in declining markets, both have seen outflows, with active funds losing more. A detailed analysis of 775 mutual funds shows that only a few are outperforming the market index, and positive returns are rare, mainly from short-selling funds. The video concludes that active fund managers are not yet shedding their underperforming reputation.

What has been the trend in the performance of passive funds compared to active funds in recent years?

• Active funds have consistently outperformed passive funds.

• Passive funds have outperformed active funds, especially during market rallies.

• Both active and passive funds have performed equally well.

• Active funds have outperformed passive funds during market declines.

What was the expectation of money managers regarding active funds during market declines?

• Active funds would underperform ETFs.

• Active funds would outperform due to risk diversification.

• ETFs would outperform due to lower fees.

• Both would perform equally well.

During the current market slump, what has been observed about the inflows and outflows of ETFs and active funds?

• Neither has experienced significant outflows.

• Both have seen equal inflows.

• Active funds have seen more outflows than ETFs.

• ETFs have seen more outflows than active funds.

How many active funds out of the 775 analyzed are outperforming the Emerging Markets Index?

• All 775 funds

• 293 funds

• Only 5 funds

• None of the funds

Which type of funds have managed to produce positive returns in the current market environment?

• Index funds

• Long-only funds

• Short-selling funds

• Balanced funds