Author(s) :

samridh rangineni.

Volume/Issue :

Abstract :

This study compares the long-term net returns of actively and passively managed funds over a 15- year window (2010–2025). Annualized net returns were calculated as the Compound Annual Growth Rate (CAGR) for a convenience sample of 21 funds — 9 passively managed index funds and 12 actively managed funds — presented in Table 1 and Table 2. Returns were computed on a total-return basis assuming full reinvestment of dividends and distributions, before individual tax adjustments and before inflation. Because 8 of the 21 funds launched after 2010, each fund was measured over its own available history within the 2010–2025 window rather than over a uniform 15-year period; observation periods are reported individually in Tables 1 and 2. Passively managed funds returned a mean of 14.80% (SD = 2.59) versus 11.65% (SD = 6.08) for actively managed funds, a difference of 3.15 percentage points. An independent two-sample t-test on fund-level CAGRs did not reach statistical significance, t(19) = 1.45, p = .163, 95% CI [−1.39, 7.70], Cohen’s d = 0.64, so the null hypothesis of no difference could not be rejected. The direction of the difference is consistent with the fee-drag hypothesis and with prior largesample evidence, but the two groups in this sample are not matched on asset class, benchmark, inception date, or risk profile, and no risk-adjusted measures were computed. The results should therefore be read as descriptive of this specific, heterogeneous sample rather than as a general test of management style.