Additionally, overall performance is also a major factor, and the actively managed mutual fund track record has not been keeping up with passive indexing methodologies.
In the 12 months ended June 30, 59.6% of large-cap funds, 68.9% of mid-cap funds and 64.3% of small-cap funds underperformed their benchmark indices. The figures are also similar for active funds over the past three- and five-years. Performance for all domestic equity fund categories fell behind benchmarks in the past three- and five-years as well. [Passive ETFs are Looking Even Better Next to Active Funds]
For more information on ETFs in 401(k)s, visit our 401(k) category.
Max Chen contributed to this article.