Index Funds No Passive Pursuit for Fidelity

Just when actively managed mutual funds are getting back on their feet, Fidelity Investments, home of stock-picking poster child Peter Lynch, is rolling out an index fund.

The Four-in-One Index is a fund of funds, investing in four of Fido's existing index products. It will allocate 55% of its assets to the (FSMKX Quote)Spartan Market Index fund and 15% each to the (FSEMX Quote)Spartan Extended Market Index fund, (FSIIX Quote)Spartan International Index fund and (FBIDX Quote)Fidelity U.S. Bond Index.

For more than a year, the S&P 500 index has embarrassed the fund industry, outperforming the vast majority of actively managed funds. But during the second quarter of this year, 69% of actively managed domestic equity funds outperformed the S&P 500 index, according to Lipper. That hasn't happened since the third quarter of 1997. ...