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.
Christine Benz does not own shares in any of the securities mentioned above. Find out about Morningstar's editorial policies.