The perennial debate over passively versus actively managed funds continues. Historically, both camps have offered sound reasoning for embracing one investment practice over the other. But they both might be right. Relative Performance: Active vs Passive On one hand, the argument goes, investors benefit from the low expense ratios and low portfolio turnover of passively managed funds, which bring passively managed mutual funds’ and ETFs’ total returns very close to their index benchmarks. However, in about 84% of the relative performance observations (fund return minus the benchmark return), passively managed funds underperformed their benchmarks after taking expenses and cash drag