After decades of investor excitement for actively managed funds, the tide has reversed – decisively. Recent money flows into passive funds have been like a raging river.

But how have returns fared, especially when advisors step back and consider results over a somewhat longer horizon?

When passive funds are declared a winner over active funds, it's often based on average fund returns for a group, says Tom Roseen, head of research services at Lipper. Naturally, in most years, a small portion of active fund managers will beat their indexes and, by extension, the passive funds pegged to those indexes. But trying to identify and buy any of those funds before they rally can be harder than drawing to an inside straight.

We’ve compiled the top 10 active funds and the top 10 passive funds ranked by three-year returns. While double-digit returns are the rule of the day, they are a bit higher on the active side.

Roseen notes that investors often forget to account for expenses. They can’t be overlooked, of course, because this isn’t not just about how well a fund performs, it’s about how much of the gains your clients get to keep. All data is from Morningstar. Click here for a slideshow version.

 

The next 10 cards show the best-performing passive funds over the past three years, which didn't perform quite as well as the best active funds.

But that's not unusual. In most years, the best active managers will outperform index funds.

Despite the upper hand that active funds can gain in the upper echelons, passive will often outperform active on average. Passive funds also have the advantage of being cheaper generally. We include expense ratios for each fund (see which one costs just 6 basis points).

All data is from Morningstar.