Er... that's what I said?
If you meant to say "luck rather than judgement". That's not the case. If variation in returns from managed funds represents variation in luck (as appears to be largely the case given how badly past performance predicts future performance) then you would still expect a portion of funds to outperform the market just by dumb luck. The number of funds that do so is entirely consistent with such an interpretation.
And even if there is a small amount of judgement in managed funds, they have an inherent cost disadvantage compared to indexed funds that they need to overcome before they actually produce a better return anyway.
Yes, that was what I meant to say!
The general issue with funds is that a lot of them have scandalous charges - and due to the greed of a large number of IFAs, they are recommended because of commission rather than performance. This has skewed the market hugely to favour high charge, low performance funds.
With more funds going low cost, and the RDR due, we should see the true performance of low cost funds compared to the trackers. My own SIPP has about ~15% in low cost funds just now (emerging markets ACC), and I've seen good performance in that portion of it. I am however quite aware that I may well need to shift my funds elsewhere if the fund begins to underperform, but the same could be said for an equity too.
