The short answer is yes. The more important question is whether active fund managers can do it consistently.

Active investing involves a fund manager selecting companies they believe will outperform the market. If they're right, investors may achieve higher returns than a simple index fund. If they're wrong, returns will be lower.

So what does the evidence show?

One of the most widely respected studies is the SPIVA (S&P Indices Versus Active) Scorecard, which compares active funds with the market. Its findings are remarkably consistent. Over long periods, the vast majority of actively managed funds fail to beat their benchmark after fees. In the latest European report, around 9 out of 10 UK equity funds underperformed over ten years, with similar results for global equity funds. That's one of the main reasons passive investing has become so popular.

This doesn't mean active investing can't work. Every year, some fund managers outperform the market, and a handful have built exceptional long-term track records. The challenge is knowing who those managers will be before they outperform, rather than looking back with the benefit of hindsight.

Active funds also tend to charge higher fees than index funds. While many passive funds cost less than 0.25% a year, active funds often charge three or four times as much. Those extra costs create an additional hurdle that managers need to overcome before investors see any benefit.

For many long-term investors, including followers of the Boglehead philosophy, this is why low-cost index funds make sense. Instead of trying to find the small number of managers who might outperform, they simply accept the market return, keep costs low and focus on investing consistently over many years.

This article is for educational purposes only and does not constitute financial advice or a personal recommendation. Investments can fall as well as rise, and you may get back less than you invest. Past performance is not a reliable guide to future returns.