Question 5 What is the primary reason index funds tend to outperform actively managed funds over the long run? O Fund managers may have perverse incentives Larger companies are represented more often in index funds Lower fees and efficient markets. O Tax advantages and greater diversification Question 5 What is the primary reason index funds tend to outperform actively managed funds over the long run? O Fund managers may have perverse incentives Larger companies are represented more often in index funds Lower fees and efficient markets. O Tax advantages and greater diversification