What good are mutual fund managers?

As if the average 401k investor doesn't already have enough on his plate these days, word comes in this WSJ report($) that more than two-thirds of managed funds - the foundation of nearly every company retirement plan - underperform the index they are measured against.

Investors in actively managed mutual funds for the past five years have reason to wonder what they have been paying for: A new study from Standard & Poor's finds that 70% of large-cap fund managers who use the S&P 500-stock index as a benchmark for comparison have failed to match the performance of the index over that time.

That is double-bad news, given that the index was down 19% in the five years that ended Dec. 31. The failure of active management is replicated across almost all categories, not only U.S. stock funds but also bond funds and even emerging-markets funds.

What's more, those numbers are similar to the previous five-year cycle. From the close of Dec. 31, 2003 to Dec. 31, 2008, the S&P 500 fell 18.8%, but still beat 71.9% of U.S. actively managed large-capitalization funds, according to S&P Index Services.

It's been a while since I've looked at any 401k plan offerings - any ETFs in there yet?