Why should you use an actively managed fund for your 401k? I have read several questions and answers on this and other sites and it seems like it's generally better to go with funds that follow the indices.
Is there a situation when using a managed fund is recommended above investing in actively managed fund?
For US stocks it's a bit of a gamble. Many actively managed funds underperform the market indexes, but some of them outperform in many years. With an index you will get average results. With an active manager you "might" do better than average. So you can view active management as a higher risk, potentially higher reward investment approach.
On the other hand, if you want to diversify some of your investments into international stocks, bonds, junk bonds, and real estate (REITs) active management is highly likely to be better than indexing. For these specialized areas specialized knowledge and research is needed.
By definition, actively managed funds will underperform passive index funds as a whole.
Or more specifically:
The aggregate performance of all actively managed portfolio of publicly-tradable assets will have equal performance to those of passively managed portfolios.
Which taken with premise two:
Actively managed funds will charge higher fees than passively managed funds
Results in:
In general, lower-fee investment vehicles (e.g. passive index investments) with broad enough diversification to the desired risk exposure will outperform higher-fee options
But don't take my wonkish approach, from a more practical perspective consider:
