More Than Half of Mutual Funds Underperform the Market. Here's Why You Can Beat Them.
Actively managed mutual funds have generally underperformed broader market benchmarks. In 2022, exactly 50% of all domestic funds underperformed the S&P 500 index. But in 2021, when the index gained 29%, 80% of funds underperformed.
That could lead investors to believe it makes the most sense to just invest all of their money in an index fund. But while it certainly does make sense to have some of your money in an index fund, there is reason to think you can do better than many actively managed funds and increase your ability to beat the market.
Why is it so hard to beat the market? Or is it so hard? Consider how large-cap fund managers have performed versus the S&P 500 over the past 20 years:
Source Fool.com
