Comparison
Active Funds vs Index Funds
Understand cost, objective, and practical portfolio roles for active and passive funds.
| Factor | Active Funds | Index Funds | Practical Guidance |
|---|---|---|---|
| Objective | Seek benchmark outperformance. | Seek close benchmark replication. | Use when aligned to your strategy and conviction level. |
| Cost | Often higher expense ratio. | Often lower expense ratio. | Cost matters most in long-term compounding. |
| Portfolio Role | Satellite allocations. | Core allocations. | Core passive + selective active is common. |