Mutual Funds Underperform The Market

Although many professional money managers and investors would like to think that they can beat the market, the evidence is against this belief. New research shows that for the 12 months preceeding June 2012, the S&P Composite 1500 outperformed 89.84 percent of all actively managed U.S stock funds. For the prior three years and five years, the percentages were 73.24 percent and 67.72 percent, respectively. Mutual fund performance is even worse for bonds funds with 93.62 percent of actively managed long-term government bond funds trailing the Barclays Long Government index. These percentages lend support for the stock (and bond) market being semistrong form efficient.