Statistics that say index funds beat most managed funds are worth the paper that it was written on! (zilch)
Most managed funds I have seen DO beat the index over time...and more importantly, the funds "I" have beat the index returns over time (and thats all that counts, what I/we own).
I have seen a number of funds compared to an index, when that fund has a different agenda than the index. For example, there are funds that are much less risky and volatile than an index. Their objective is to "give up" some upside gain in order to protect against big market drops. Remember, higher risk equals higher return and vice versa.
Its like comparing returns of a bond to a stock. The stock will win (longterm) but took more risk.
Also many funds (like Janus) have beaten the index, but they took on more risk. There is no magic trick here.
Indexers DON'T factor this in to their stats.
Plus, index funds are NOT diversified, can't sell "problem" companies, act a like a technology mutual fund (and who wants a tech fund for a core holding?). No one really looks at that now do they?
Don't buy into the "hype" that index funds are so great. If I saw that their was any value...then thats all I would buy. But I don't see it!
There are plenty of well managed mutual funds that have beaten the index over time, and are cost efficient and more diversified.
Two sources promote index funds: the media and the index mutual funds themselves....and both have a vested interest in indexing... go figure!
By the way, in year 2000 the S&P 500 was down (-9%), the techs in the index were down (-40%), BUT the rest on the index (which is the majority of the companies) GAINED 5.9%! You call that diversified?????
If you like indexing, great, but there is NO proof that index funds beat managed funds when comparing apples to apples (where index advocates like to compare apples to oranges).
And thats my 2 cents... and then some!