Are managed funds any good?

Are active fees actually yielding any outperformance, let alone absolute returns? A question asked in BT dated Feb 12, 2009.

Based on public data, for a 3-year period to end January, Asia ex-Japan funds:-

• Asia ex-Japan funds lost negative 9% on an annualised basis, compared to
• negative 11% by the MSCI Asia ex- Japan index.

Over a 5-year period,

• the funds lost one per cent on an annualised basis, compared to
• the index loss of 0.13%.

Over 10 years,
the funds' record shows an annualised return of 3.49% among funds, against
2.66% for the index.

Based on the above numbers ==> the index has beaten the fund managers in 2 of 3 categories.

Have you started your soul-searching over the value of active management ie. are the fund managers any good? I have. If you refer to my earlier posting, I am concluding just that. I can't PERSISTENTLY beat the market in the long run.

I won't be surprised that high networth clients are preparing to show fund managers / private bankers the door, replacing their allocations with no-frills index funds.

Should part of sovereign wealth of a nation be in no-frills index funds too?