It’s undoubtedly true that there are a minority of actively managed funds that have outperformed a comparable index in the long run (less than 10%, by some measures).
However, it is unclear how investors can choose which fund will outperform the market and which fund will receive a participation award.
Investors who have chosen a fund that beats the market long term like to think that they have some secret sauce (and perhaps they do) but past performance is not indicative of future performance. Acticely managed funds that do well the previous 15 years may do poorly the next 15 years (thats why backtesting is so frowned upon--you can always find some period in which your strategy beats the market). And it’s difficult to know if investors who do choose the correct fund are skilled or lucky.
For these reasons, among others, it’s best to just choose a low cost index fund. You can be reasonably sure of the return you are getting, and it’s undoubtedly a good return (or else why would active investors have so much trouble beating it?)
Happy to hear your thoughts on this. Loved the article otherwise but I think I’ll stick with my index funds.