• / Free eNewsletters & Magazine
  • / My Account
Home>Research & Insights>Investment Insights>12 Shocking Mutual Fund Statistics

Related Content

  1. Videos
  2. Articles

12 Shocking Mutual Fund Statistics

Enter the realm of the strange but true.

Russel Kinnel, 09/30/2010

Think you know everything about mutual funds? "Then I have something to tell you which may shock and discredit you." (Lionel Hutz, The Simpsons) ... Or at least make you say "hmmm."

1. Bruce Berkowitz at Fairholme FAIRX and Fairholme Focused Income FOCIX has 140 times more money invested in his funds than Harry Lange has in Fidelity Magellan FMAGX. We know this because Magellan's latest filing showed Lange with between $500,000 and $1 million in his fund. Meanwhile, the management company overseeing the funds has $148 million in his two funds. While it has two employees, Berkowitz had been the sole employee when the funds listed $139 million invested in them.

2. Fully 75% of the balanced funds with star ratings of 1 star in 2005 were wiped off the face of the earth in the ensuing five years. Now that's attrition. We found that 1-star funds were much more likely to be killed off than higher-rated funds. Why? Poor performance and resultant poor flows mean a fund isn't likely to be a money winner for the fund company. On the one hand, it's bad for fund investors that these records get swept under the rug. On the other, investors in bad funds are probably better off getting their money back or having their fund merged into another.

3. Large-growth funds have seen $113 billion in net outflows since 2001. This year is already the worst year for large-growth flows, with $29 billion in net outflows. Mind you, the category received $170 billion in net inflows in just 1999 and 2000 combined. Needless to say, it's been a brutal 10 years for large growth.

4. Money market funds are paying almost nothing but are getting inflows. The last time short-term rates approached zero, December 2008, money flew out of money markets. This time around, it's flying in. While the yields may be similar, there is one big difference. The other time, people were worried about big funds breaking the buck. This time around, there's no panic.

5. The best 15-year returns belong to a bond fund. GMO Emerging Country Debt III GMCDX has a 17.5% annualized 15-year return. No, that won't happen the next 15 years.PAGEBREAK

6. There were 650 funds with Growth in their names that actually shrunk over the past decade.

7. 54% of funds with the word Plus in their names have underperformed over the past five years.

8. The worst 15-year return is an annualized 8.17% loss by Apex Mid Cap Growth BMCGX. Along the way, the fund was actually top dog in its category in 2003 (165% return) and 2008 (9% loss). If ever there were a case for why you should look beyond a single year's return, this is it.

9. The highest turnover rate is Direxion Monthly Emerging Markets Bear 2x DXESX with a 5,062% turnover. Leverage, shorting, and extremely short stays by shareholders make for one heck of a turnover rate.

10. There are 18 funds on pace for their 12th straight year of outperformance versus their category peers. Considering the bear markets, credit debacles, and bubbles contained in those years, that's pretty impressive. Not surprisingly, only two all-equity funds made the cut.

11. Four funds are on pace for their 11th straight year of underperformance. So, clearly not all mistakes are swept under the rug. The Feeble Four are: Embarcadero Market Neutral EFMNX, ING Emerging Countries NECAX, Performance Short-Term Government Income PFSFX, and ProFunds Bull BLPIX.

12. The money PIMCO collects on fees for PIMCO Total Return PTTRX ($1.14 billion) could buy 76 million yoga mats; 3,000 Rolls Royce Phantoms; 114 million Snuggies for dogs; 207 million 22-ounce Rogue Mocha Porters; 9.1 million subscriptions to Morningstar FundInvestor; 142 million 22-ounce Goose Island Sofie Ales; or bail out Lindsay Lohan 2,700 times.

Russel Kinnel is Morningstar's director of fund research.

Get mutual fund and stock information from our analyst team delivered to your e-mail inbox every Tuesday. Sign up for our free Investment Insights e-newsletter.

blog comments powered by Disqus
Upcoming Events
Conferences
Webinars

©2014 Morningstar Advisor. All right reserved.