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Jul 28
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I found some interesting comparisons of returns of index fund and mutual funds.
From motley Fool website;
During the 1990s, the S&P 500 has provided an annualized return of 17.3%, compared with just 13.9% for the average diversified mutual fund.
And From Yahoo
In 1998, for instance, 85 percent of all mutual funds that were set up to beat the S&P 500 failed to meet that goal. When you think about it, that’s an amazing statistic — eight out of ten mutual funds didn’t beat the market!
Investing in a stock index fund guarantees that you’ll never outperform the overall but an index fund might give investors a higher return because of their cost advantage. Index funds have lower or zero fees, they also don’t hire expensive equity analyst. All that saving is passed to investors.