I always tell people to invest in index funds, and your case is another great example of why.

Study after study has failed to show the link between good past results and good future results. In fact, good past results is a better predictor of poor future results than good returns due to the concept of ‘reversion to the mean’. The only consistent reliable predictor of good future fund return is low expenses. Funds with no loads consistently outperform load funds. Funds with lower expenses consistently outperform funds with high expenses.

Everyone wants to beat the market. Unfortunately it’s more difficult than you think, especially over the long term.

Investing is a zero sum game. Investors as a whole make up the market, so as a group, investors can do no better than the market itself. If one investor outperforms the market, another one must underperform it by a like amount.
Mutual fund costs diminish returns. If funds had no costs, investors as a whole would match the market’s returns. But after costs (sales loads, operating expenses, and so on), investors do less well than the market, or index, because the market, or index, doesn’t have costs.

Financial markets are efficient. Information is so readily available, especially about large U.S. companies, that it’s tough for any fund manager to sustain a performance edge over the long term. Some markets are less efficient (international and U.S. small capitalization companies), but they tend to have higher costs, which diminish their returns.

Index investing has an inherent cost advantage. The indexing strategy minimizes fund costs, which can take a large bite out of your investment returns. Index funds have:
Low operating expenses. Index funds expense ratios average 0.28%. The average managed fund has an expense ratio of 1.5%.
Low transaction costs. An index fund does little trading. An actively managed fund’s brokerage and other trading costs may reach 1% of assets annually.

Over time, the broad U.S. stock market indexes have outperformed general equity funds, on average.
Over ten years, the total return of the Wilshire 5000 (1989-1998) is 414.67% (average annual rate of 17.80%). The average general equity fund cumulatively returned 312.48% over 10 years (average annual rate of 15.22%).
In the last ten years 11% of managed funds beat the S&P 500 index. Over the last 15 years only 4% of actively managed funds beat this index.

Yes, that's right. Only a measly 4% of actively managed funds beat the passive index.

Your odds at picking an actively managed fund that will beat an index fund over the long-term are so bad that you would be better off gambling at Las Vegas.

Let's compare your fund to the Total Stock Market Index, the largest and broadest index fund available.

YTD, the index has earned 7.91%, your fund -7.05%
One year, the index has earned 10.25%, your fund -3.11%.
Five years, the index has earned 8.45%, your fund 2.82%.
10 years, the index has earned 8.56%, your fund 5.14%.

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Paul S.

2001 E430, Bourdeaux Red, Oyster interior.
79,200 miles.

1973 280SE 4.5, 170,000 miles. 568 Signal Red, Black MB Tex. "The Red Baron".