A new report by Morningstar shows that lower-cost active funds have higher success rates than the most expensive funds.
Success rates measure the percentage of funds from the beginning of a sample period that generate a return in excess of the equal-weighted average passive fund return over the period.
The largest variance over the 10-year period ended 2014 was among U.S. large-cap value funds -- where the lowest-cost funds had a success rate of 66.3% vs. 18.6% among the most expensive funds.
Morningstar's analysis shows the lowest-cost U.S. micap value funds had the highest odds of success over the 10-year period (68.2%), followed by U.S. large-cap value (66.3%) and international large-cap blend (58.5%).
