Worse, their fees are usually way higher than the mutual fund average of 1.2% ( see table).
According to the latest Dalbar study, the average stock mutual fund earned a little over 9% a year over the last 20 years while the average stock fund investor earned less than 4% a year over that same time period.
The average exchange traded fund (ETF) does have a lower expense ratio than the average traditional mutual fund, but not less than most low-cost index funds that have been available for decades.
They invest their 401(k) account equally in a stock mutual fund and a bond mutual fund, each of which charges average market fees.
The average mutual fund holding period for equity or fixed income is only about three years.
From 2000 to 2010 the average mutual fund posted an annual total return of 3.18%.
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On the main track employers offer a streamlined menu of mutual fund choices to keep average workers from feeling overwhelmed.
Investors, they say, have done no better with the average mutual fund than they could have done by purchasing an index fund.
That's actually a tad below the average mutual fund performance.
The average mutual fund management fee is 1.4%.
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According to Morningstar, the average stock mutual fund had a total return of 7%.
As a result, the average mutual-fund portfolio is more volatile than the market.
In fact, per Strategas, from March 2009 through July 2011, mutual fund flows reflect that the average investor has been a net seller of stocks despite a near 100 percent market rally during the time period.
By comparison, the average diversified stock mutual fund manager, according to Lipper, had a total return of 12.37% last year.
The average stock mutual-fund investor paid 0.79% in fees last year, according to the Investment Company Institute, a fund-industry trade group.
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About 1.75% of assets, not a lot more than the 1.57% the average managed mutual stock fund charges, according to Morningstar.
Finally, active ETFs have dramatically lower expenses as compared to the average actively managed mutual fund, but of course, this is largely determined by the asset class being represented in the fund.
Not only did the average actively managed mutual fund underperform its comparable index fund net of fees, but it was also almost impossible to identify actively managed mutual funds that could outperform their benchmarks on a consistent basis.
It's important to remember, Miller says, that the extra four months is much like the average return in a mutual fund.
Finally, despite the fact that the most industry commentators were opposed to the proposal, the new amendments require a mutual fund that invests more than 10 percent in equities to disclose the average commission rate paid by the fund.
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You might dollar average into USERX, a mutual fund that holds a diverse number of precious metals mining stocks.
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Since a broker, if one is involved, receives a fee from the mutual fund instead of charging a load, this could be causing average fees to rise (loads are not included in most expense ratios).
"Disclosure of mutual fund companies is woefully inadequate, so it's impossible for average people to parse fees and the impact on their returns, " he said.
They found that of the top 40 performing mutual funds between 1982 and 2007, every single fund had multiyear periods of underperformance, with the longest lasting an average of five years.
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