Much ado has been made about the splashy start this year for equity funds.

In January, mutual funds that invest long-term in domestic stocks picked up $19.6 billion, according to Investment Company Institute stats. This, after dropping $545.4 billion since the start of 2008.

But, lo and behold, the new darling of stock investors-the exchange-traded fund-did even better. Assets of ETFs that invest in domestic stocks grew from $764.7 billion at the end of December to $809.6 billion at the end of January. Gain: $44.9 billion.

That naturally brings out a lot of gnashing of teeth. ETFs typically invest in baskets of stocks set out in a chosen index. Fees are low. Holdings are disclosed daily. And you can move in or out, at any time of day.

What's not to like?

If you're a big marketer of mutual funds-particularly actively managed ones-you tend to take an agnostic view. Ask Fidelity Investments or T. Rowe Price and the position of those fund firms is: We don't play favorites. We let our advisors work with their clients to make the best choices, whether an actively managed mutual fund or a passively managed ETF.

Even American Funds, which makes its reputation on the success it generates from active management of holdings, is not willing to say mutual funds are superior to ETFs ... or other investment options.

But it is ready to make the case for active management. "The active decision to buy, sell or hold makes a difference,'' contends Chuck Freadhoff, director of media relations for The Capital Group Companies, which owns and operates the American Funds.

Over time, transaction fees versus management fees disappear as a debate-if the performance is there. And, if you're investing for the long haul, the ability to trade intraday is moot.

It's the long haul that shows the benefit of active management, in the American Funds book.

Its flagship fund, the Growth Fund of America, has produced an average annual return of 13.4%, since inception at the end of 1973, by Capital Group's count.

The Standard & Poor's 500 in that same time has produced an average return each year of 10.5%.

If rules were different, American Funds would consider launching an exchange-traded fund. But, as Freadhoff naturally notes, the "devil is in the details.''

And the details that American Funds does not want to disclose are the holdings in its funds. At least not every day.

"The transparency? We're not going to do that,'' Freadhoff said last week.

Why? It's like showing your cards to another player, who can just mimick what you do. Without doing any original research or betting on one's own brain.

It's not like Major League Baseball Hall of Fame pitcher Nolan Ryan used to go around telegraphing a pitch or reporting a hit. If everyone can already see what's happening in the strike zone, what are your choices when you get on the pitcher's mound?

"It's a bit of a conundrum,'' said Freadhoff. "Are you going to throw a strike ... or pitch out?"

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