92% of all actively managed stock mutual funds have failed to beat their benchmark over the last 15 years, according to S&P Dow Jones Indices. Stated another way, only 8% of thousands of fund products have been able to do what they were supposed to have been able to do.
Can you imagine if 92% of the cars sold by auto companies couldn’t drive? Or if 92% of the pills sold by the pharmaceutical industry were placebos, or worse? What if 92% of the pizzas sold by Domino’s were just Ritz Crackers. How is this a thing that exists?
Don’t worry, nobody knows.
For the ten years ending 12/2015, mutual fund investors, collectively, have received returns that were $545 billion below what the indices would have given them. And for that, they’ve paid $437 billion in fees.
Here’s what that looks like, but don’t show it to anyone (their head might explode):