The DOL’s proposed regulation on selecting investments, including alternative assets, 2026-06178.pdf, identifies six factors that should be considered in the process of selecting any investments for participant-directed plans, such as 401(k) plans and private sector 403(b) plans. The six factors are: Performance, Fees, Liquidity, Valuation, Performance Benchmark, and Complexity. The proposal describes each of those factors and provides 20 examples of their application. In my post Alternative Assets (9) I discussed the second factor, Fees. My last three articles, Alternative Assets (10), Alternative Assets (11), Alternative Assets (12) and Alternative Assets (13) examined the first four Fees examples in the proposal. This article looks at the fifth example of the application of the Fees factor. (5) Example. Fees; Active management— (i) Facts. The named fiduciary of a plan (e.g., the plan sponsor or plan investment committee) considers six small-cap stock funds. Three of the funds passively track the same index while three of the funds are actively managed, attempting to outperform the passive index. The passive funds are all comparably priced to each other, and the actively managed funds are comparably priced to each other. However, the actively managed funds all have higher fees and expenses than the passive funds. The