A couple months ago, my company switched their 401k plans from Amvescap to Fidelity. I had mostly index funds in my 401k at Amvescap. But when my 401k plan was converted over, several of the equivalent funds were actively managed. Actively managed means that there is some guy being paid to make buy and sell decisions. To pay the guy, they have to charge slightly higher fees. But the problem is that actively managed funds don’t tend to do any better than index funds. In fact they often do worse due to the costs involved.
So I was forced to switch my 401k holdings into the actively managed funds as they were my best option.
But I got a letter in the mail saying that they are adding index funds to our 401k choices. One of the funds (Dreyfus Mid Cap Index Fund) is the same one I had over at Amvescap. I compared the funds, and the new index funds had done as well or slightly better than the actively managed funds that I currently have. The new index funds will be be in our 401k lineup effective June 30th. So I will look at switching over then.