Some funds well above total market index
Some funds well above total market index
At the end of each week, I calculate the total percentage that each of my funds has risen above its 52-week low.
I found tonight's results particularly interesting:
+42.04% VISVX Small Cap Value Index
+40.18% VGPMX Gold, Platinum, and Mining
+40.09% VGSIX REIT Index
+38.56% VEIEX Emerging Markets Index
+35.84% VMVIX Mid Cap Value Index
+34.42% VISGX Small Cap Growth Index
+33.84% VMGIX Mid Cap Growth Index
+27.02% VTSMX Total Stock Market Index
I found tonight's results particularly interesting:
+42.04% VISVX Small Cap Value Index
+40.18% VGPMX Gold, Platinum, and Mining
+40.09% VGSIX REIT Index
+38.56% VEIEX Emerging Markets Index
+35.84% VMVIX Mid Cap Value Index
+34.42% VISGX Small Cap Growth Index
+33.84% VMGIX Mid Cap Growth Index
+27.02% VTSMX Total Stock Market Index
Average
On average (and ignoring fees), half of all equity fund outperform Total Stock Market every year.
http://www.bogleheads.org/wiki/index.ph ... ock_Market
http://www.bogleheads.org/wiki/index.ph ... ock_Market
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Re: Average
Regarding the idea that half of all funds beat the index each year (before expenses):
The takeaway message is the same, but isn't it be more accurate to say that (before expenses) half of all dollars invested in equity funds outperform the total stock market each year? (That is, for each extremely large fund that underperforms, there could be several outperforming--or vice versa.)
The takeaway message is the same, but isn't it be more accurate to say that (before expenses) half of all dollars invested in equity funds outperform the total stock market each year? (That is, for each extremely large fund that underperforms, there could be several outperforming--or vice versa.)
Mike Piper |
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Re: Average
And fully half of them underperform...so when added together - TADA - they make up the average.Dan Kohn wrote:On average (and ignoring fees), half of all equity fund outperform Total Stock Market every year.
http://www.bogleheads.org/wiki/index.ph ... ock_Market
This is like saying half the people in the world are below average intelligence - because that is the way it is calculated. (I suspect more are below average intelligence because of a skewed distribution - but that is strictly personal opinion).
You just got lucky and chose the ones this time performed better.
I'm the OP and I agree with the point that others have made about the list of currently booming funds being similar (but not identical) to a list of funds which have been the biggest losers over the past 12 months. Yes, the current winners are high beta funds.
Below is a revised and expanded list of my "slices" which shows both the good and the bad news as of today.
UP = Percentage the fund has risen from its 52-week low
DOWN = Percentage the fund is still below its 52-week high
---UP-------DOWN--
+42.04% -40.65% VISVX Small Cap Value Index
+40.18% -68.09% VGPMX Gold, Platinum, and Mining
+40.09% -56.82% VGSIX REIT Index
+38.56% -50.06% VEIEX Emerging Markets Index
+35.84% -41.29% VMVIX Mid Cap Value Index
+34.42% -41.22% VISGX Small Cap Growth Index
+33.84% -45.55% VMGIX Mid Cap Growth Index
+29.38% -41.99% VIVAX Value Index
+28.43% -48.43% VFWIX FTSE World exUS Index
+27.02% -39.68% VTSMX Total Stock Market Index
+26.57% -53.93% VEURX Europe Index
+25.82% -41.20% VPACX Pacific Index
+25.66% -52.25% VGENX Energy
+22.95% -37.84% VIGRX Growth Index
The lesson I draw from this list is that individual funds, even index funds, can deviate widely from the total market index, both upwards and downwards. Even when correlations approach 1.00 during a crash. It's data like this that confirms my predilection to slice and dice (and rebalance fairly frequently) rather than simply put all of my equity money into a total market index and forget about it.
Below is a revised and expanded list of my "slices" which shows both the good and the bad news as of today.
UP = Percentage the fund has risen from its 52-week low
DOWN = Percentage the fund is still below its 52-week high
---UP-------DOWN--
+42.04% -40.65% VISVX Small Cap Value Index
+40.18% -68.09% VGPMX Gold, Platinum, and Mining
+40.09% -56.82% VGSIX REIT Index
+38.56% -50.06% VEIEX Emerging Markets Index
+35.84% -41.29% VMVIX Mid Cap Value Index
+34.42% -41.22% VISGX Small Cap Growth Index
+33.84% -45.55% VMGIX Mid Cap Growth Index
+29.38% -41.99% VIVAX Value Index
+28.43% -48.43% VFWIX FTSE World exUS Index
+27.02% -39.68% VTSMX Total Stock Market Index
+26.57% -53.93% VEURX Europe Index
+25.82% -41.20% VPACX Pacific Index
+25.66% -52.25% VGENX Energy
+22.95% -37.84% VIGRX Growth Index
The lesson I draw from this list is that individual funds, even index funds, can deviate widely from the total market index, both upwards and downwards. Even when correlations approach 1.00 during a crash. It's data like this that confirms my predilection to slice and dice (and rebalance fairly frequently) rather than simply put all of my equity money into a total market index and forget about it.