Just 8.2% of large-cap domestic mutual funds outperformed the S&P 500 over the past 20 years. The odds are better over shorter time horizons, but ultimately the index seems to have a clear advantage.

Index funds stay the course and can hold onto laggards that an actively managed mutual fund ... the market. These funds can also have goals that go beyond mirroring a popular stock market index.

At the end of what was arguably one of the best years for the stock market in more than a decade, investors in any of the 20 ...