Mutual fund investors often lack understanding of what they own and their inherent risks, according to a new study.

A large percentage of investors who have owned passive products (48%) chose this strategy because of a belief that it represented "minimal risk," the report released Thursday by Boston-based MFS Investment Management highlights. Less than half of passive investment owners polled in the MFS Investing Sentiment Insights survey (48%) indicated knowing the correct definition with 41% saying they have "no idea." Of the 958 investors surveyed, who all have $100,000 or more in household investable assets, 38% said they thought passive investments are designed "to significantly outperform the market at any given time through research-based stock-picking."

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