Why Most US Equity Funds Underperform the S&P 500

• We analyzed 2,495 equity-focused funds to uncover the truth about large US mutual fund performance. Our study focused on US equity, Allocation, and International Equity funds with assets of $500 million and above, excluding closed and target date funds.
• The results were startling: 80-90% of these funds consistently underperformed the S&P 500 across 1-year, 3-year, 5-year, and 10-year periods. Similarly, the MSCI World index saw 60-70% of funds lagging. Over a decade, 75% of these funds trailed the S&P 500 by at least 2% annually, and 50% by at least 4%. Nearly half never outperformed the benchmark even once.
• In stark contrast, only 1% of these funds managed to consistently outperform the S&P 500. These findings echo Warren Buffett's advice to invest in index funds rather than trying to beat the market.

At Quantlake, we advocate for quantitative, systematic, ETF-driven portfolio models to help investors achieve superior financial outcomes without the hassle of market timing or constant monitoring.

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Happy Long-Term Investing from the Quantlake Team!

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