As investors continue to divert dollars from actively managed funds to lower-cost passively managed index funds, research conducted by two finance professors at Pace University has revealed an interesting finding, according to last week’s Wall Street Journal. The study found that diversified emerging-markets funds that are actively managed are more likely to outperform their less actively managed peers as well as index funds.

Matthew Morey and Aron Gottesman, finance professors at Pace University’s Lubin School of Business in New York, tracked the 67 U.S.-based actively managed emerging markets funds in the Morningstar database from 2009 through the end of 2014 –using the MSCI Emerging Markets Index as their benchmark—examining each fund’s level of “active share” (the percent of a fund’s holdings that deviate from their benchmark) as compared to their performance.

Funds in which 80% or more holdings differed from benchmark index outperformed significantly, the study found, even when factoring in expenses. While Morey says that he would gear most people toward passively managed funds, he explains, “emerging markets is a bit of a different animal. There’s a lot more opportunity, the markets are not as efficient and there is a lot more variety in the type of companies to choose from as compared to domestic stocks.”

However, Morningstar’s Russel Kinnel (director of manager research), argues that there are factors other than a fund’s active share that may contribute to the outperformance. Funds that chose not to invest in Latin America, for example, “may have done better than some that were invested there as Latin American stocks have been laggards for much of the past 10 years.” As those stocks recover, he says, even funds with high active shares may underperform the index.