The Morningstar US Active/Passive Barometer for 2024 provides insightful data on how active funds have been performing compared to their passive counterparts. Over the past decade, active funds have faced challenges, marked by consistent outflows and difficulty in outperforming passive funds. However, the total assets in US passive mutual funds and ETFs exceeded those of active funds for the first time.

Despite these trends, active management is far from obsolete. Active managers have managed to compensate for outflows through strategies like asset appreciation and fee bases during lucrative market conditions. Yet, the changing market environment could pose challenges.

Key Findings from the Morningstar US Active/Passive Barometer:

  • Success Rates: In 2024, active small-cap managers had a higher success rate (43%) compared to mid-cap (37%) and large-cap (37%) managers. However, over the last decade, only 7% of active large-cap funds survived and outperformed their passive counterparts.

  • Challenges in Large-Cap Equity: Only 7% of active US large-cap funds managed to survive and outperform passive competitors over the past decade. However, there was an improvement in their performance in 2024, with a success rate increase to 37%.

  • Success in Small-Cap Categories: Active small-cap funds performed better over the long term, with a 43% success rate in 2024, suggesting that the market is less efficiently priced in this category.

  • Real Estate and Fixed Income: Actively managed US real estate funds displayed the highest success rate among all categories with 47% succeeding over the past decade. In fixed income, active bond managers saw increased success rates in 2024, particularly in intermediate core bonds, corporate bonds, and high-yield bonds.
Active management remains a viable option for certain categories, notably in real estate and fixed income markets. The Morningstar report provides a comprehensive analysis that aids financial advisors in understanding the dynamics of active versus passive fund performance.

The original article on Morningstar discusses these findings in detail, highlighting the importance of the Active/Passive Barometer as a tool for evaluating investment strategies, offering insights into fees, market dynamics, and success rates across various fund categories.

Chart of actively managed us real estate funds

Global real estate funds success rate decline chart

Rolling success rates for active intermediate bond funds

More Articles

Getting licensed or staying ahead in your career can be a journey—but it doesn’t have to be overwhelming. Grab your favorite coffee or tea, take a moment to relax, and browse through our articles. Whether you’re just starting out or renewing your expertise, we’ve got tips, insights, and advice to keep you moving forward. Here’s to your success—one sip and one step at a time!

Florida Homeowners Finally Get a Break as Insurance Rates Begin to Drop

After years of soaring premiums and insurer instability, Florida’s property insurance market is finally turning a corner. Major carriers have filed 83 requests for rate decreases heading into 2026, with companies like Florida Peninsula and Patriot Select proposing cuts of 8.4% and 11.3%. Some homeowners may see relief as early as next month, signaling a long‑awaited shift toward market stability.

The Fix-and-Flip Comeback: Why 2026 Is Poised to Be a Breakout Year for Investors

Fix-and-flip investing is gearing up for one of its strongest years in a decade as 2026 approaches. With cheaper capital, more accessible funding, easing interest rates, and long-awaited increases in housing inventory, investors are finding the perfect environment to launch or scale renovation-based real estate businesses. Renovation continues to outpace new construction in cost and speed, and demand for move-in-ready homes remains high, making 2026 a powerful opportunity window for both new and experienced investors.

Falling Rents Today, Rising Pressures Tomorrow: A 2026 Rental Squeeze Is on the Horizon

After a short-lived period of relief in 2025, the U.S. rental market may be headed for a tighter, more expensive 2026. With construction starts dropping nearly 11% and completions plunging 42%, the surge of new apartments that helped lower rents is rapidly drying up. Rising costs, shrinking inventory, and a slowdown in new development point to a potential rental crunch that could leave renters facing heavier competition and higher prices across major markets next year.

The Biggest Opportunity in Real Estate Since 2008

The commercial real estate market is entering a rare reset that experts say mirrors the post‑2008 boom, creating a potential window for disciplined investors. With trillions in commercial debt coming due and property values dropping up to 40%, firms like AARE are positioning themselves to acquire assets below replacement cost—an advantage that could set the stage for significant long‑term growth.

Six for 2026: The Commercial Real Estate Shifts Already Reshaping the U.S.

Commercial real estate is entering a reinvention phase, with AI‑driven productivity, modernized office demand, experience‑focused retail, expanding industrial logistics, creative housing solutions, and sustainability‑centered design all accelerating nationwide. These six forces are shaping how investors, brokers, and future licensees will operate in a rapidly evolving U.S. market.

2026 Becomes the Turning Point: Innovation, Stability, and Upward Mobility Return

After years of economic uncertainty and cautious decision‑making, 2026 is shaping up to be the year professionals finally catch a break. AI is moving from buzzword to essential tool, capital markets are beginning to thaw, and hiring is picking up across real estate, mortgage, insurance, finance, and healthcare. With opportunity returning, many professionals are using this moment to upskill—pursuing new licenses, certifications, and cross‑industry expertise.