So why is that? Because the cost of mutual fund management is about 1.6%. I'm oversimplifying, it's smaller at large-cap funds and bigger at small, but it's telling us what we should know: that the average manager is averaged before cost. How else can that be? It's a very competitive business, very smart people competing with one another, but it's hard to get an edge. 

I think there's very little evidence that indexing, even at 45% of the fund industry, has changed the nature of the market. I would add this: Supposing the market is less efficient and people will say, "ah ha," then managers can do well.

Benz: Active managers will have their day.

Bogle: Active managers. There will be a stock-picker's market, as they say. No, because if active manager A beats the market, active manager B will lose to the market. There's no way around the fact that that part of the market that's outside of indexing, if somebody does better relative to the market, somebody does worse relative to the market. 

As for a stock-picker's market, I never saw a phrase that seems to have such acceptance that meant so little when one thinks about it. Sure, there's a stock-picker's market, but every stock that's picked is unpicked by somebody else. Everybody that buys is buying from a seller. It's the simplest thing in the world that people don't seem to get. We're all consigned to average as a group. And when you take costs out, that's where the index advantage comes in.