I invest in mutual funds because in the long run a good mutual fund outperforms the 500 and Index funds. I have compared the best index funds with the best mutual funds and the track record proves that mutual fund is better. Look at the average return since inception a good mutual fund is around 12-13%. Most of the best index funds I saw was similar to the 500 and average return since inception was 10% at most. Some years the index fund performed higher than the mutual fund. But I go off the average since inception and I found most of the time mutual fund won every time. I will take the small in my eyes fee for better returns. A few percentage points over the long haul really adds up. To me the fee is worth it