Mutual Funds: Worst Year Ever

Think you had a bad year? The mutual fund industry just finished its worst year ever in terms of relative performance. Only 20% of actively managed funds were able to beat the Russell 1000.

By the end of November, a quarter of all funds were beating the index but it got even worse in December.

Given that the December rally was led by low priced, small cap, less liquid companies that are inherently difficult for large cap managers to meaningfully overweight, performance was hard to come by – last month, the lowest priced companies which constitute about 10% of the benchmark, contributed almost 20% of its returns.

(Via: Aleph Blog)

Posted by on January 5th, 2011 at 10:09 am


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