Mutual Funds Underpform...Again

In our discussion of market efficiency, one trait of an efficient market is that it is difficult for investors to outperform the market. The results for mutual funds for 2020 are in and it appears that the market won again. For large-cap equity funds, 57.1 percent underperformed the S&P 500, the 11th straight year less than half of large-cap funds outperformed the S&P 500. Over a 20-year horizon, only 4 percent of large-cap funds outperformed the index, while 10 percent of mid-cap funds and 6 percent of small-cap funds could make that claim. It appears that the market is tough to beat.