Even the Best Funds Underperform

Even most successful funds will nderperform over certain time periods. Most people aren't cut out for this and therefore should use index funds

Jeffrey Ptak 23 March, 2018 | 10:01AM

US Equity Fund Performance

The “slow-and-steady” fund manager is a myth and investors hunting for such funds are largely wasting their time, Morningstar analysis has shown. Instead, they should assume that the most successful funds will be erratic and underperform over certain time periods. Most people aren't cut out for this and therefore should use index funds.

Morningstar analysts examined the calendar-year net returns of more than 4,800 unique US stock funds for the 20-year period from 1998 to the end of 2017, including dead funds. We ranked the funds for each calendar year based on their net returns against their category peers. We then tallied up the number of times each fund finished in the top half of performers during the 20-year period.

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About Author

Jeffrey Ptak  Head of Manager Research

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