THERE'S NO SUCH THING AS QUALITY:

Whenever small investors have been pitched a financial product that promised to enrich them with little effort or expense, historically the smart response has been to turn and run.

There has been one shining exception over the last four decades: low-cost mutual funds that aim to do nothing more, or less, than generate the average return of the entire stock market, or a specific market sector.

These "passively managed" or "index" funds have delivered as they said they would -- and have shamed many "actively managed" U.S. stock funds, the majority of which over the long run have failed to exceed or match the average market return after deducting their fees.

Passive funds were relatively slow to catch on with individual investors in the 1980s and '90s. But over the last few years, Americans have poured record sums into the funds, including those that replicate the Standard & Poor's index of 500 big-name U.S. stocks. In that same period, investors have yanked record amounts from actively managed funds.

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