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Bogle (the founder of the indexing religion) has a somewhat suspect chart comparing index and active returns.

He notes that actives hold cash, and trade excessively, and have higher expenses, and notes that those three factors add up to the difference between index and active funds.

Question: Why should I pay the active fund 100 basis points a year to hold cash for me? I get a better rate in my bank account!

I'm sure the acolytes on the Index Funds board could point you to the article
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