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Market Update

4 Ways to Keep More of Your Funds' Returns

Following a disciplined investment strategy can help you keep more of what your fund holdings earn.

Our annual "Mind the Gap" study found that there’s a persistent gap between the returns investors actually experience and reported total returns. After adjusting for the impact of cash inflows and outflows, investors earned about 7.7% per year on the average dollar they invested in mutual funds and exchange-traded funds over the trailing 10 years ended Dec. 31, 2020, compared with reported total returns of 9.4% per year. This shortfall, or "gap," stems from inopportunely timed purchases and sales of fund shares, which cost investors nearly one sixth the return they would have earned if they had simply bought and held.