Chapter 9. Mutual Funds: Carrying the Load

Over the past three decades, mutual funds have made a lot of people rich. Unfortunately, most of them are not mutual fund investors. As the previous chapter illustrates, the average mutual fund does not beat the market. Regardless, providers of mutual funds have experienced quite a bull market over the past couple of decades. Assets invested in mutual funds increased from $100 billion at the end of 1979 to $1 trillion in 1989, and to $6.4 trillion in 2001.[1] These assets were invested in stock and bond funds as well as in retail and institutional funds. Including management fees, 12b-1 fees, and soft dollar arrangements (discussed later in this chapter), a conservative estimate of the total fees charged ...

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