Investors often look to Morningstar for a definitive answer on whether they should employ actively managed mutual funds or simple low-cost index funds and exchange-traded funds.
The answer, alas, isn't black and white. Assuming an investor focuses on low-cost funds (whether active or index), creates a sound asset-allocation plan, and doesn't undermine his or her results by buying high and selling low, it's possible to create a successful portfolio plan using an all index funds, all actively managed products, or some of both.
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Christine Benz does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.