top of page

Dan Solin: This Index Fund Can Clobber Your Returns

Recently, I reviewed the investment options available in a mid-size 401k plan. It was the usual fare: mostly high expense ratio, actively managed funds which historically underperformed their benchmarks. There was one index fund in the mix, which the plan administrator proudly pointed out to me. It was the Dreyfus S&P 500 Index Fund PEOPX.

I checked the data on this fund from the Dreyfus web site. Here’s what I found:The fund has over $2.4 billion in assets. It has total expenses of 0.50%, including a management fee of 0.25% and a “service fee” of 0.25%.

The goal of this fund is simply to track the performance of the S&P 500 index. How difficult can this be?

Quite difficult, when you have an expense ratio of 0.50%.The fund underperformed the index by 0.42% in the last year; 0.38% over 3 years and 0.46% over 10 years.

Expense ratios can clobber returns.

Read the complete article here:  Dan Solin: This Index Fund Can Clobber Your Returns.

0 views0 comments

Recent Posts

See All

Are Equity-Indexed Annuities a Safe Investment?

This article explains why I NEVER recommend indexed annuities to clients.  Please let me know if you have any questions. Steve =========================================== A tweet pitching equity-index

Avoid The Recency Pitfall

Larry Swedroe does a great job of talking about the importance of re-balancing.  Steve ============================================= Last year, U.S. real estate investment trusts (REITs) were the best

bottom of page