WHAT IS A GOOD PERCENTAGE OF PROFIT FOR AN AVERAGE MUTUAL FUND?

Or for the broader investment portfolio managed by an investment firm?

{ 2 comments… read them below or add one }

gosh137 August 11, 2010 at 11:34 am

Over the past 80+ years, the average annual gain of “the market” has been around 11%. So anything over that should be a “good percentage of profit” for a mutual fund.

El Guapo August 11, 2010 at 12:28 pm

It completely depends on what time period you’re looking at. What you really want to compare is how your fund compares with the overall market (or, preferably, other funds in your fund class).

For example, the market (as measured by the S&P 500 Index) over the last 12 months lost about 20%. So, if your fund lost only 10%, that’s a good return.

Historically (going back to the late 1800’s), stocks have returned about 10% per year on average. You should expect a well-diversified stock mutual fund (with an expense ratio below 1%) to do about the same over the long term, going forward.

I hope that helps.

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