One way to measure the damage is what is known as the “return gap,” or “investor gap.” This gap captures the difference between the average return for a fund and what the average investor actually experiences in returns within that fund. A mutual fund’s stated return will reflect the average return of its stock or bond holdings over a period of time. This would yield a return gap equal to 13 percentage points. In what types of funds do investors suffer the biggest return gaps? Lost Money The 10-year 'return gap' for investors (percentage points a year) in mutual fund types 2.5 Pct.

Source: Wall Street Journal May 07, 2018 02:11 UTC