Mutual fund performance and survivorship bias

Mutual fund performance

As we have noted in previous Mathematical Investor blogs (see this blog for instance), surprisingly few mutual funds beat their respective benchmark (typically some market index). Even fewer consistently beat their benchmark year after year.

A new report from S&P Dow Jones sheds light on this phenomenon. It tabulates, for each year from 2001 through 2017, the percentage of mutual funds in various categories that are out-performed by their respective benchmarks. Here is a brief summary of this performance data.

Table 1: Percentages of U.S. mutual funds beaten by their benchmark

Category Benchmark 2011 2012 2013 2014

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