While passive stock exchange traded funds mimicked the performance of the broad stock markets last year, the majority of active stock mutual fund managers did more harm than good as they tried to beat the market.
According the S&P Indices’ 10th annual fund performance scorecard, around 84% of U.S. stock funds under active management underperformed Standard & Poor’s indexes in 2011, reports Mark Jewell for the Associated Press. [Active Manager Flameouts Drive Investors to ETFs]
To put this in perspective, over the past 10 years, the average percentage of funds that underperformed has been around 57%.
The S&P revealed that growth stock funds were the biggest losers last year, with about 96% of large-cap growth funds underperforming their respective S&P benchmarks last year. In comparison, about 54% of Large-cap value funds underperformed.