However I don't think simply dismissing all actively managed mutual funds is right either. Generally the traditional mutual fund wrapper is not my preferred vehicle. I generally prefer individual stocks and exchange traded funds but we have one traditional mutual fund that we have used as an across the board holding to seek out a specific effect. The fund in question has generally delivered that desired effect but of course no fund or stock or anything else can be perfect all of the time.
For someone building a portfolio that makes country and sector decisions even if not a lot of individual stock picks a traditional fund can work. For someone who wants Australia at the country level then I imagine the first thing they would look at is the iShares Australia ETF (EWA). There are several other ETFs, at least one closed end fund and at least one traditional mutual fund for Australia. If somehow the traditional fund in the space, it is actively managed, outperformed EWA at every turn then I think people would have to consider it, past-performance warnings notwithstanding. This could also be about a risk adjusted result too not just nominal performance.
Likewise with any other desired attribute for a portfolio. I tend to more interested in the realm of absolute return or alternative but whatever the case I would not totally dismiss some segment of the market.