The gap between mutual fund returns and what investors actually earn

The gap between mutual fund returns and what investors actually earn


The distinction between style drought and process failure matters. A value fund trailing in a momentum-driven market is the former. The style is out of favour; the process may be intact. This is when patience is appropriate, and often when it is hardest. A fund drifting from its stated mandate, or one that spends most of its time underperforming across market conditions, is the latter. That warrants action.

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