I have a combination of market index funds coupled with active mutual funds with the premise that by carefully selecting active funds can supplement and "boost" the return of the underlying index fund.  Charles Schwab wrote a lot about the strategy and labeled it "core+explore".  Trouble is, as for any active investor I'm sure, managing the active funds isn't easy.  I've got good Morningstar screens to identify good active funds to buy within an asset class (which look at expenses, tax cost ratio, turnover, mgmt tenure, and performance compared to asset class index over 1, 3, 5, 10 yrs).  So buying isn't the hard part.  Selling is the hard part.  If you hold active mutual funds, you need a perpetual strategy to move from active fund to active fund should an active mutual fund manager start to fall behind the index (and need to catch it so that your total return including expenses and tax implications doesn't fall beneath the index else you might as well just own the index).  And of course, it's complicated by cap gain taxes when you do sell out an active fund with NAV gains within a taxable account.

So I'm one active investor (actually I hold more % in index funds, so really I'm an active+passive combo investor) who would love to hear tidbits of how other active mutual fund investors "auto-drive" the management of the active mutual fund portion of their portfolios.  What are your sell triggers?  What do you take into account in those triggers?  How do you manage in light of taxes?  And finally how do you pick your replacement active mutual funds and feel confident that they will be able to beat their asset class index?

(And I'd ask that index investors give active investors a chance to respond and not turn this into an active-vs-index flame thread.)

Thanks in advance for any active mutual fund management strategies folks are willing to share.

-Andy