Great point! The only quibble I have is that 'compound return' doesn't include fees. However, 'total return' includes both fees & distributions (such as dividen

Great point! The only quibble I have is that 'compound return' doesn't include fees. However, 'total return' includes both fees & distributions (such as dividends). If we use fairly common fees, the table looks more like this: Option 1: 0.25% fee, Option 2: 1.5% fee Year 1 7.75% 13.5% Year 2 7.75% 5.5% Year 3 7.75% 2.5% Year 4 7.75% 17.5% Year 5 7.75% 4.5% Total gain: 45.2% 50.7% Compound/yr 7.75% 8.5% Once you include the fees (especially if the fund has a 'load' or sales fee) actively managed funds have to do significantly better than low fee index funds just to match total performance. Edit: formatting