No. For me, I'd always prefer to choose a professional who'll get me a result better than average, even if it costs me a bit more.
Yes, I'm biased. I know our oldest active fund (it's nearly 20 years old) has beaten the index, after fees, by around 1-2 per cent every year. But not all active funds have done as well.
I'm obviously alone in my passion. Millions of dollars have flowed out of active managed funds and into passive funds in recent years and it seems the trend is gathering steam.
What I find interesting is that passive funds are used in a way that's far from passive. I envisaged ordinary people would put their money in a passive fund in a sort of "set and forget" strategy - but that's not what happens in practice.
The people who invest the most in passive funds are professional investors - the guys and gals who want to quickly get a position in the US market or in emerging markets like Brazil or China. They buy index funds and trade these positions vigorously - dare I say actively - as their views change.
Meantime, "Mum and Dad" investors apparently use index funds primarily to get international exposure but, when it comes to investing at home, they are happy to make active bets.
I wouldn't choose a passive option for anything in my life.
The other interesting aspect of passive investing is that virtually every investor I speak to has an opinion. They might not like companies involved in unethical industries. They might think Auckland Airport shares are expensive, or dislike Xero shares as the company is yet to turn a profit.
But they are happy to invest in a passive fund that offers no opportunity to reflect their opinions.
In my view, the fact that we all have opinions will ultimately curtail the popularity of passive investing.
I suspect a lot of people don't realise that, with passive investing, companies get more money invested in them not because they're great but because they're big.
An index is based on the size of a business, not its quality. So a big company might be a horrid business with weak management but, if it's big, index funds will keep investing in it.
If investors want to put some pressure on management and the board to encourage change, well, they're out of luck. Index funds don't do that; active funds do.
The idea of "do nothing" investing is appealing. But, as in any of life's pursuits, a passive or indifferent approach just doesn't stand up to scrutiny.