Index Funds Win Again

From Time magazine online:

Index mutual funds trounced actively managed mutual funds last year by the widest margin in 15 years, once again raising the confounding question: Why do so many individuals gravitate to actively managed funds when they are a proven loser?

...According to the latest S&P Index Versus Active (SPIVA) scorecard:

“Over the past three years, which can be characterized by volatile market conditions, 64% of actively managed large-cap funds were outperformed by the S&P 500; 75% of mid-cap funds were outperformed by the S&P MidCap 400; and 63% of the small-cap funds were outperformed by the S&P SmallCap 600.”

It’s more of the same with foreign stock funds: 57% of global funds, 65% of international funds and 81% of emerging markets funds trailed their benchmarks.

What accounts for such steady index outperformance? 
In large part, it comes down to fees....
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Link: http://moneyland.time.com/2012/02/24/index-funds-win-again-this-time-by-a-landslide/