On funds of domestic stocks, they’re throwing away something like $54 billion a year. The investor return on this index fund is a bit less, at 12.6%. Morningstar has 827 domestic-stock funds with both ten years of history and sufficient detail on asset balances to permit a calculation of investor return. This shortfall comes from both bad timing by customers and a parallel flailing by the funds. In their struggle to beat the market the fund managers ran up trading costs as well as their own management expenses.

Source: Forbes June 12, 2020 09:56 UTC