An advantage of index funds that hasn't yet been mentioned is the low management fee, as it's not actively managed. I pay 0.3% on my index fund compared to 2.3% for my actively managed developing markets fund.
Once you include that fee, the majority of funds fall short of their benchmark index.
http://www2.standardandpoors.com/spf...VA_2007_q1.pdf | Fund Category | Comparison Index> | % of funds outperformed by index from Q1 2002 – Q1 2007 |
| All Domestic Funds | S&P Composite 1500 | 61.39 |
| Small Cap Growth Funds | S&P SmallCap 600/Citigroup Growth | 87.84 |
| International | S&P/Citigroup PMI World Ex U.S. | 81.69 |
| International Small Company | S&P/Citigroup EMI World Ex U.S. | 71.88 |
| Emerging Markets | S&P/IFCI Composite | 85.33 |