What mutual funds beat the S&P 500?
Rowe Price U.S. Equity Research fund (ticker: PRCOX) is in this exclusive club, having bested—along with a team of about 30 research analysts—the S&P 500 index for the past five years on an annualized basis. U.S. Equity Research is a Morningstar five-star gold-medal fund.
Rowe Price U.S. Equity Research fund (ticker: PRCOX) is in this exclusive club, having bested—along with a team of about 30 research analysts—the S&P 500 index for the past five years on an annualized basis. U.S. Equity Research is a Morningstar five-star gold-medal fund.
What Are the Results? Generally, when you look at mutual fund performance over the long run, you can see a trend of actively-managed funds underperforming the S&P 500 index. A common statistic is that the S&P 500 outperforms 80% of mutual funds. While this statistic is true in some years, it's not always the case.
S&P 500 Index Versus Nasdaq 100 Performance
Nasdaq 100 has significantly outperformed S&P 500 in terms of performance. Over the past 15 years, Nasdaq 100 has delivered a CAGR of around 16%, while S&P 500 has returned about 8%.
| Focused funds | 5-year-return (%) | Benchmark index (%) |
|---|---|---|
| 360 ONE Focused Equity Fund | 22.21 | 17.61 |
| Franklin India Focused Equity Fund | 18.03 | 17.45 |
| HDFC Focused 30 Fund | 18.96 | 17.45 |
| ICICI Prudential Focused Equity Fund | 19.04 | 17.61 |
I put my personal 401(k) and a lot of my mutual fund investing in four types of mutual funds: growth, growth and income, aggressive growth, and international.
However, if you need comprehensive financial advice and guidance, a financial advisor could be worth the additional cost. In many cases, it's not a matter of choosing between the S&P 500 and a financial advisor, as a financial advisor may recommend investing in the S&P 500 as part of a broader investment strategy.
S&P Dow Jones Indices' scorecard compares the performance of actively-managed mutual funds to major indices. It found that over the course of one year, 51.08% of actively-managed mutual funds underperformed the S&P 500, and 48.92% of actively-managed funds outperformed the S&P 500.
| Ticker | Name | 5-year return (%) |
|---|---|---|
| AMAGX | Amana Growth Investor | 17.62% |
| APGYX | AB Large Cap Growth Advisor | 17.00% |
| PBFDX | Payson Total Return | 16.58% |
| CFGRX | Commerce Growth | 16.48% |
A recent ETMutualFunds study of active large cap funds revealed that 80% schemes managed to beat their benchmarks. It clearly states that active fund management has staged a comeback in style.
Which 5 star mutual funds have 10 year performance?
Five large cap mutual funds that gave the highest return in the past 10 years are Nippon India Large Cap Fund which gave 17.09% returns, followed by Mirae Asset Large Cap Fund with 16.99% return. The other three are ICICI Prudential Bluechip Fund, SBI Bluechip Fund and HDFC Top 100 Fund.
| Fund Name | 5 Years Return | 10 Years Return |
|---|---|---|
| Quant Large and Mid Cap Fund (G) | 26.3% | 23.5% |
| Mirae Asset Large & Midcap Fund (G) | 21.5% | 23.4% |
| Kotak Emerging Equity Scheme (G) | 22.7% | 22.9% |
| Motilal Oswal Midcap fund (G) | 26.9% | 22.6% |
No. 1 on the list is the ProFunds Semiconductor UltraSector Fund, which yielded 29.21% over the past decade. In second place is the Direxion Monthly NASDAQ-100 Bull 1.75X Fund, with 28.16%. And the bronze medal goes to the Rydex NASDAQ-100 2x Strategy Fund, which yielded 26.58%.
| Fund Name | Category | 1Y Returns |
|---|---|---|
| Kotak Infrastructure and Economic Reform Fund | Equity | 49.7% |
| Tata Small Cap Fund | Equity | 41.8% |
| SBI Contra Fund | Equity | 49.9% |
| Bandhan Tax Advantage (ELSS) Fund | Equity | 16.8% |
ETMutualFunds analysed the daily rolling returns of 302 equity schemes that have completed three years. Two schemes offered more than 40% in three years. ICICI Prudential Commodities Fund offered the highest return of around 42.86% in the three year horizon. Quant Small Cap Fund gave 40.52%.
- Axis Bluechip Fund.
- Canara Robeco Bluechip Equity Fund.
- Mirae Asset Large Cap Fund.
- Baroda BNP Paribas Large Cap Fund.
- Edelweiss Large Cap Fund.
Yes, millionaires do invest in mutual funds. This investment choice aligns with the need for diversification, a key strategy in wealth management.
| Scheme Name | Expense Ratio | 5Y Return (Annualized) |
|---|---|---|
| Motilal Oswal Midcap Fund | 0.64% | 27.66% p.a. |
| Quant Large and Mid Cap Fund | 0.75% | 27.38% p.a. |
| SBI Contra Fund | 0.68% | 27.25% p.a. |
| Mahindra Manulife Mid Cap Fund | 0.5% | 27.03% p.a. |
Citadel, which ranked second in 2023, made $8.1 billion in profits after bringing in a record-breaking $16 billion in 2022. Its $74 billion in gains since inception rank it as the most successful hedge fund in history.
Yes, you may be able to beat the market, but with investment fees, taxes, and human emotion working against you, you're more likely to do so through luck than skill. If you can merely match the S&P 500, minus a small fee, you'll be doing better than most investors.
What financial advisors don t tell you?
- "I offer a guaranteed rate of return."
- "Performance is the only thing that matters."
- "This investment product is risk-free. ...
- "Don't worry about how you're invested. ...
- "I know my pay structure is confusing; just trust me that it's fair."
While indexes may be low cost and diversified, they prevent seizing opportunities elsewhere. Moreover, indexes do not provide protection from market corrections and crashes when an investor has a lot of exposure to stock index funds.
As of Q2 2023, Linde plc (NYSE:LIN) shares were held by 70 of the 910 hedge funds tracked by Insider Monkey, valued at $4.6 billion. This makes Linde plc (NYSE:LIN) the most commonly owned stock by hedge funds on our list of 13 stocks that outperform the S&P 500 every year for the last 5 years.
Although it is very difficult, the market can be beaten. Every year, some managers boast better numbers than the market indices. A small fraction even manages to do so over a longer period. Over the horizon of the last 20 years, less than 10% of U.S. actively managed funds have beaten the market.
Index funds offer lower fees and tax efficiency. Due to their passive nature, they often perform in line with market benchmarks, making them suitable for investors seeking broad market exposure at lower costs. On the other hand, active mutual funds aim to outperform the market by employing active management strategies.
