Only if it has uncorrelated returns and/or lower volatility than the index strategy.
Buying stocks at random has the same average return as buying the index, but has higher volatility and highly correlated returns. Buying at random doesn't "compete" with index funds.
Not necessarily. If my strategy is "pick 500 big companies, and buy shares weighted based on market cap" and it ends up mirroring the S&P500, I haven't done anything interesting.
