By Michael Finch Learn more about Michael on NerdWallet’s Ask an Advisor Comparing the goals of actively managed funds and passively managed funds (“index funds”) is relatively simple: Actively managed funds try to beat a given benchmark, while index funds attempt to track the benchmark. So which is better for your portfolio? Index funds outshine the rest Numerous studies, including a 2014 Vanguard study, demonstrate that low-cost index funds have displayed a greater probability of outperforming higher-cost actively managed funds.