The Lemon Fool

And once index funds demonstrate they can consistently beat active funds what will happen to that sector?

But they can’t can they? Index funds can only get market returns less costs/friction losses, which leaves the rest of the market returns (and exactly the same returns) for the active investors (from which, costs/friction losses). So they both get the same returns.
But you can have bad and worse indexes, which I suppose gives some succour to the active investors. And the active investors are funds and individuals; you asked about funds, so I suppose active funds could take from active individual investors, thus out-gunning index funds, but not many seem to.

JohnW wrote:But they can’t can they? Index funds can only get market returns less costs/friction losses, which leaves the rest of the market returns (and exactly the same returns) for the active investors (from which, costs/friction losses). So they both get the same returns.

But they don't do they?

Yes, I’d say can’t, don’t and shan’t.

JohnW wrote:Yes, I’d say can’t, don’t and shan’t.

Which begs the question of what the market is?