A 20-year analysis by S&P Dow Jones confirms that 92% of actively managed large-cap funds underperformed the S&P 500 index. The data is unequivocal: index investing wins for most people.
The Numbers
- 92% of active large-cap funds underperformed over 20 years
- Average active fund fee: 0.68% vs index fund: 0.03%
- Fee drag costs: $180,000 over a career on a $500K portfolio
- Best index funds: VTI, VOO, FXAIX
The math is simple: paying 0.03% at Vanguard instead of 0.68% for active management saves $180,000+ over 30 years on a $500K portfolio, while delivering better returns 92% of the time.
