A dozen shocking statistics about fund returns, fees, and broken promises.
Investing is full of numbers, charts, and statistics; the fund industry hardly disappoints on that score. There are the old standards--total returns, yields, and expense ratios, for example--and there are plenty of mountain charts and quartile plottings. Then there are category averages, return rankings, index comparisons, and so on. But sometimes buried deep in the sea of numbers are some interesting, even shocking, figures and relationships. We regularly compile some of the ones that have caught our eye and share them with readers. Thanks to my fund analyst colleagues who contributed.
The fees PIMCO Total Return
78 and Negative 46%
The number of commodity-focused exchange-traded funds that launched in 2007 and 2008--just in time for staggering losses. The S&P GSCI Index, a commonly tracked broad commodity index, shed 46% of its value in 2008.
Up 90% = Down $5 Billion
No, the math doesn't add up, but that's what happened to real estate fund investors. The average real estate fund (U.S. and global) appreciated 90% from January 1999 to December 2008, but investors in those funds lost a little less than $5 billion over that time. The reason? Most of the money rushed in near a high, well after the big gains were locked in, and then the real estate market began its fast and furious downward spiral.
9.94 Percentage Points and 3.99 Percentage Points
994 basis points is the amount by which the average intermediate-term bond fund trailed the Barclays Capital Aggregate Bond Index in 2008. Most funds owned fewer Treasuries and held a lot more in corporate issues than the benchmark. Both decisions hurt, but the trend has started to reverse. For the first half of 2009, the average fund in the category had a 399 basis-point leg up on the bogy.
55 out of 330
Those intermediate-term bond funds didn't only have a hard time besting the index, but 17% of them (or 55 out of 330) lost more than 10% in 2008.
Nine and 10%
Nine diversified domestic equity funds with at least $100 million in assets have posted an average annualized return of at least 10% for the trailing 10 years through the end of June. Only one of those nine funds was a large-cap fund: CGM Focus
8.41% and 3.31%
The average year-to-date return through the middle of 2009 of diversified domestic equity funds that finished in the bottom quartile in 2008 is 8.41%. The average year-to-date return for those that finished in the top quartile last year is 3.31%. As investors have become more optimistic about financials and the economy, some of the stocks--and the funds that owned them--that fell the farthest have come back. Meanwhile, the more conservative portfolios that proved more resilient last year haven't had quite the same bounce.
65% and 15%
The short interest in the Financial Select Sector SPDR
25.7% to 6.8%
The 10-year return of Matthews Korea
That's the average 2008 loss posted by funds with "absolute return" in their names. Investors have come to think of absolute return as synonymous with positive returns year-in-year-out, but that's not a promise these funds were able to keep last year.
Nine and 297
Nine ETFs have more than $10 billion in assets, and 297 have less than $25 million. Time will tell how long some of the smaller ETFs can survive on such a small base.
Negative 70% and Negative 72%
The peak-to-trough loss of Ariel
Have you come across any shocking fund statistics of your own? You can post them in the comments section at the bottom of this page.
Karen Dolan is Morningstar's director of fund analysis.