S&P analysis over the past 15 years has shown that most mutual funds have had trouble beating their respective indices. Just 1 of 175 growth funds performed better over that period, and just 8% of US stock funds in 401(k) plans outperformed. Part of this stems from the strength of equity funds, which have held a 6.7% annualized return over the past 15 years.
While mutual funds have not been beating the market, bond funds performed well last year with 80% of intermediate term high quality bond funds beating out their index. Some investors predict that these results will continue with raising interest rates, while other active managers believe the next market downturn will benefit them.
Over the past 12 months, many investors have been moving out of active to passive funds with $638 billion moving into index funds and active funds losing $310 billion. To read more about the change from active funds to passive funds, check out the link below.
Even if you don't choose us to manage your accounts, please ask your advisor
if they are a fiduciary and how they make their money. The answer could surprise you.
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