Bloomberg.com: Exclusive

Bloomberg.com: Exclusive:

"Which approach is best, active or passive investing, is a never-ending debate on Wall Street, where passive indexers such as DFA and Vanguard Group Inc. are the antithesis of celebrity stock pickers. If there's any criticism of indexing, it's that as goes the market, so go the indexes, which can lead to losses unless an investor also invests in active funds to mitigate the market swoons.

The indexers have been winning lately. According to the Standard & Poor's Indices Versus Active Funds Scorecard, which tries to add substance to the debate, the S&P 500 Index beat both actively managed large- and small-cap U.S. stock funds last year. The index topped 69.1 percent of large-cap funds, while the S&P SmallCap 600 Index led 63.6 percent of small-cap funds. The indexes posted similar results for the past three- and five-year periods."