Morningstar’s director of global ETF research, Ben Johnson, recently shared research regarding the relative performance of active and passive investors with Christine Benz.

Morningstar’s data on domestic equity cash flow-weighted returns for index fund versus active investors, says Benz, “makes index fund investors look pretty smart. According to Johnson, the research shows that index fund performance has a lower “return gap”—the difference between time-weighted and cash flow-weighted returns. That is, index investors set expectations for tracking market performance less a small fee, and that’s typically what they get.

Johnson points out the importance of understanding the data’s underlying calculations because “at best,” he says, “they are a proxy for investor behavior.” For example, he explains, the ongoing flow of dollars over the past ten years—while the market has trended upward– from active to passive strategies will “naturally make the dollar being invested in the index mutual fund look like a good decision by comparison.”

On the international equity side, Benz notes, the data doesn’t reflect the same strong performance. Johnson explains, “There are some really good active managers out there that have had more faithful shareholders relative to their index counterparts. I would caution against painting with broad brush strokes here in saying that any of the learnings applies universally when it comes to understanding what’s going on with respect to investor behavior.”

On general conclusions drawn from the data, Johnson concludes, “I think it boils down to quite simply, pick a plan and stick to it.”