A small 🧵 on Mutual Funds performance,
If you look at the last 3 years CAGR,
In the Small cap Mutual Fund category,
(a) Index Return = 27.11%
(b) Average MF in this category gave = 29.98%
(c) Worst Fund generated = 21.66%
(d) Best Fund generated = 52.78% (1/4)
#investing

Similar is the case with Midcap category,
(a) Index Returns = 25.89%
(b) Average MF in this category gave = 24.67%
(c) Worst Fund = 17.37%
(d) Best Fund generated = 38.13 (2/4)

Observations,
(a) Index generated 5-8% more than the worst performing MF
(b) At the same time, the best performing MF generated 12 to 25% more than the index
(c) Above all, the difference between the best MF & the worst MF is a HUGE 20-30% (3/4)

Food for thoughts,
This is hindsight & difficult to know what will work in the coming 3 years but rewards for getting it right & opportunity loss for getting it wrong is HUGE for both Active & Passive investors. (4/4)