The following data represents the average mutual fund returns
for various asset classes and sectors over the last ten years for the period
ending 12-31-12. I read recently in the
WSJ that the average returns for mutual funds are not accurate because the return
data does not include mutual funds that were closed due to poor
performance. While I know the very few
funds that fit this profile are not included in the data provided by
Morningstar, it also works both ways. Two
mutual funds that I have personally owned for many years do not show up this
data. Had each of these funds been
included in the data then it would have enhanced the returns even further. For example, the Yacktman Focused Fund
(YAFFX) was classified as a large cap value fund by Morningstar for almost the
entire time period examined. In early
2012 the classification changed to large cap blend as Donald Yacktman added
some traditional large cap growth names to his fund. This funds ten year average annual return for
the time period examined was 10.94% which drastically outperforms the large cap
value category average annual return of 6.36%.
The same can be said of the Oakmark International Fund (OAKIX). It too was classified as a foreign large cap
value fund for most of the past ten years.
Yet it is currently classified as a foreign large cap blend fund and is
also not included in my data. OAKIX
achieved an average annual return of 11.22% for the ten year period examined
which also easily outperformed the foreign large cap value return of 8.04% for
the same period of time.
In the end we are still viewing the average performance of
thousands of mutual funds for a given time period. Yes, some dogs are not included in the data,
and some of the best managers of all-time are also not included in the
data. Enjoy the data for what it is and
the story it is telling. That story is
that the S&P 500 and the broader markets have shown tremendous resilience
throughout the last ten years.
10Yr * 5Yr * 3Yr * 2012
S&P 500 Index Total
Return
|
7.10%
|
1.66%
|
10.86%
|
16.00%
|
Asset Classes
|
||||
Domestic Large Cap Value
|
6.36%
|
0.21%
|
8.90%
|
14.53%
|
Domestic Mid Cap Value
|
8.85%
|
2.99%
|
10.90%
|
16.43%
|
Domestic Small Cap Value
|
9.40%
|
4.22%
|
11.77%
|
16.16%
|
Foreign Large Cap Value
|
8.04%
|
-3.69%
|
3.11%
|
16.49%
|
Foreign Small/Mid Value
|
10.18%
|
-1.68%
|
6.84%
|
20.55%
|
Domestic Large Cap Growth
|
6.40%
|
0.78%
|
9.02%
|
15.26%
|
Domestic Mid Cap Growth
|
8.40%
|
1.25%
|
10.87%
|
13.89%
|
Domestic Small Cap Growth
|
8.43%
|
1.78%
|
11.49%
|
13.24%
|
Foreign Large Cap Growth
|
8.39%
|
-2.67%
|
5.53%
|
17.88%
|
Diversified Emerg Markets
|
15.22%
|
-1.87%
|
4.07%
|
18.06%
|
Gold & Precious
Metals Equities
|
14.45%
|
4.81%
|
0.89%
|
-8.66%
|
Real Estate
|
11.42%
|
5.05%
|
16.99%
|
17.64%
|
Broad-Basket Commodities
|
5.77%
|
-3.83%
|
1.47%
|
-0.32%
|
Sectors
|
||||
Technology
|
8.90%
|
2.18%
|
7.91%
|
13.19%
|
Consumer Discretionary
|
7.54%
|
5.53%
|
16.39%
|
21.76%
|
Financials
|
3.58%
|
-3.20%
|
5.96%
|
24.68%
|
Telecom
|
9.16%
|
-0.59%
|
9.69%
|
15.57%
|
Industrials
|
9.37%
|
2.32%
|
12.47%
|
19.13%
|
Utilities
|
10.14%
|
0.15%
|
8.97%
|
7.26%
|
Natural Resources
|
11.27%
|
-3.65%
|
2.01%
|
4.41%
|
Real Estate
|
11.42%
|
5.05%
|
16.99%
|
17.64%
|
Health Care
|
9.21%
|
5.96%
|
12.47%
|
21.46%
|
Energy
|
13.22%
|
-3.39%
|
3.59%
|
1.42%
|
Consumer Staples
|
9.36%
|
5.99%
|
12.91%
|
14.65%
|
* denotes average annual
ret
|
Jon R. Orcutt is the founder of Allocation For Life, Author of The Allocation For Life Investment Newsletter, Author of "Master The Markets With Mutual Funds: A Common Sense Guide To Investing Success" and manager/creator of the AFL Models available to Allocation For Life subscribers at Folio Investing.