The Central Bank of Ireland is investigating almost 200 investment funds for possible mis-selling after the financial regulator launched a probe into the practice of asset management companies hawking expensive, supposedly market-beating funds that only track the index.

In an open letter sent to the investment industry, the Irish regulator said it had carried out a “detailed inspection” of 2,550 funds that claim to be actively managed by expert stockpickers and found that 182 did little more than “move in line” with the index, a situation the watchdog said warranted further investigation.