Real Returns

Beyond official mutual fund returns are "investor returns," which factor in the timing of investors' purchases and sales. Thus, investor returns depict the return earned by a fund's typical investor.

In every diversified stock fund category, investor returns for the last 10 years have lagged total returns. This was especially true for growth funds. What's more, for every category, the investor return of the low-volatility quartile trounced the high-volatility quartile.

NOTE: Mutual fund investors likely will post better long-term returns with low-volatility funds, which tend to be those that led their categories during the 2000-2002 bear market.

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