Being smart with $$ -- Advertisers in mutual funds entertain us

TV ad: A big mutual fund company asks why settle for average returns with an index fund that simply mimics a sector when you can buy their company's funds.  Here's why: One of their 3 large-cap funds did an average of 1% worse per year than an index fund of large stocks over the last 3 years.  Their 2nd large-cap fund did an average of 5% worse per year for the last 3 years and their 3rd (and newest), large-cap fund did over 8% worse in the last year. So do they really need to ask why we would settle for average? Wouldn't it be simpler if they suggested that we buy index funds and then just write them a check for entertaining us with colorful and exciting ads?
(Disclaimer: Only large cap stock funds were analyzed and their funds in other sectors may have done better.)
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com