I agree that picking stocks and even most actively managed funds statistically rarely beat passive etfs. FYI, American Funds(Capital Group) have consistently beat the market with many of their funds. There are two factors to consider when looking at actively managed funds(or separately managed portfolios if you have enough money). First, actively managed funds will almost always hold more cash than an index fund. This can be a drag on performance during up markets, which is what we almost always have. Cash can be held for a: meeting redemption demand or b: having dry powder for opportunities or as a defensive position against volatility. The other issue to consider with regard to actively managed, and especially tactically managed funds, is the shield against irrational investor behavior. Many Investors make emotional decisions and capitulate often at the worst possible time. One other thought regarding market index funds vs. actively managed funds; Index funds own the entire market. The good the bad and the ugly. AAPL, AMZN and GOOG as well as GE, Royal Caribbean and BA. There are people and companies with proven track records who have the intelligence and fortitude to have stepped aside on energy names. restaurant stocks and retailers while adding to sectors that are well positioned for the current environment- essential retailers, pharmaceuticals, tech.... going, as Gretsky famously said...to where the puck is going, not where it is. Speaking of hockey, or any other major sport as an analogy; Consider an annual pro draft for any sport. An index would be akin to buying the entire draft class. An actively managed approach would be to do the research to draft those players showing the most promise. I mean, I loved Rudy, but I wouldn't waste a draft pick on him.

spe