“Finance professors Stuart Michelson of Stetson University in Deland, Florida and Rich Fortin of New Mexico State University at Las Cruces studied active verses index fund returns over two periods, 1975 to 2000 and 2000 to 2005. The study, published in the Journal of Financial Planning, used net return figures, meaning active fund managers had to cover their fees as well.

The study found that, on average, index funds outperformed actively managed funds across the board, with the exception of two sectors: small capitalization stocks and international funds.

“If the market is moving a great deal up or down, but especially down, your index funds are going to be moving along with the market,” says Michelson. “It’s just that potentially the managed funds are going to be even worse than that.”

The link in the quotation above is to the article revealing the results for 1975 through 2000. A commentator cited in the article speculates that an active fund manager may have an advantage in areas where market inefficiencies (or rather, lack of information available to the market as a whole) may exist, such as in small cap stocks or international funds.

As for the 80% mark, you may be understating how often index funds beat actively managed funds. See Tables 1 and 2 from this 2006 article from the FPA Journal. For large cap funds, it’s a bit shy of 90% for a 20 year period and hovers between 72% and 85% for ten year periods.