If it seems like I write this same article every year, you are correct. Don’t blame me, blame the active mutual fund managers who continue to miss the mark. A report from S&P Global states that halfway through 2016, 90.2% of all US mutual funds that invest in US stocks failed to beat their benchmark. You can read the full article below. These numbers are devastating to an industry that was already facing investor out-flows.
If you have a portfolio of actively managed mutual funds, odds are your returns are not looking so good this year. Are you investing in a taxable account? If so, the short and long term capital gains accrued by these funds can erode your after-tax returns even further. My guess is that most individual investors would be happy with the return of the index this year. Whether its the S&P 500 or the Russell 2000, ETF’s can provide inexpensive exposure to any index. With active mutual funds consistently missing the mark, it’s no wonder ETF’s are increasing in popularity.
*The above article is informational in nature only and is not a recommendation to buy or sell securities. All information is gathered from sources believed to be reliable, but neither Charles Brown nor Ausdal Financial Partners, Inc guarantees the accuracy of the information. All investments carry a degree of risk. Individuals should consult with their tax and investment professionals before making changes to their investment portfolios.