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Average Mutual Fund Return: Historical Data & What It Means for Investors 2026

By Nick Subich

Across the 1-year through 20-year horizons ending December 31, 2025, our research team analyzed data from four authoritative sources: the S&P Dow Jones Indices SPIVA scorecards, Morningstar, the Investment Company Institute, and DALBAR.^1,8,12,9 The goal was a complete picture of the average mutual fund return across time horizons, capitalization tiers, geographic regions, fee levels, and the gap between what funds report and what shareholders actually keep. The primary finding: the average actively managed fund trails its benchmark in nearly every market and time frame, and the average investor trails the funds they own. For investors with $1 million to $10 million, the levers that move outcomes are cost and discipline, not the search for next year’s top fund.

Two methods drive every figure below. An equal-weighted average treats every fund the same, measuring the skill of the typical manager. An asset-weighted average weights each fund by its assets, tracking the experience of the typical dollar. The SPIVA scorecards also correct for survivorship bias by measuring every fund available at the start of each period, not just the funds that survived.¹
U.S. Mutual Fund Returns Trail the Benchmark at Every Horizon
U.S. equity funds set the tone for the global industry. Across every horizon, the average domestic equity fund trailed the S&P Composite 1500, and the gap widened with time as fees compounded against the benchmark. The table shows equal-weighted average returns for all domestic equity funds through December 31, 2025.¹

Time horizon (annualized)	Average domestic equity fund	S&P Composite 1500 benchmark	Gap
1 year	11.95%	17.02%	-5.07 pts
10 years	10.98%	14.46%	-3.48 pts
20 years	8.29%	10.88%	-2.59 pts

Equal-weighted average returns for all U.S. domestic equity funds versus benchmark, periods ending Dec. 31, 2025. Source: S&P Dow Jones Indices, SPIVA U.S. Year-End 2025.

Key Takeaways

Over 20 years the average U.S. equity fund returned 29% per year, trailing its benchmark by 2.59 points annually.¹
The shortfall grows with the horizon, from 3.48 points over 10 years to 5.07 points in 2025 alone, as costs compound against a costless index.
Long-run winners exist but are rare. Over 25 years the top fund, the Baron Opportunity Fund, returned 13.0% versus about 9% for the market, a statistical outlier rather than a repeatable template.³

79% of Active Large-Cap Funds Underperformed in 2025
The S&P 500 finished 2025 up 18% on the strength of a narrow group of mega-cap technology stocks. Diversification rules kept most managers from matching that concentration, so underperformance spiked. The pattern repeats across most markets, with Indian mid- and small-cap funds the notable exception.¹

Region / category	2025 benchmark return	Active funds underperforming (2025)
U.S. large-cap	S&P 500 +18.0%	79%
Canada equity	S&P/TSX +31.7%	93.4%
U.K. large-/mid-cap	S&P United Kingdom	89%
Eurozone (pan-regional)	S&P Europe 350 +20.5%	82%
India large-cap	S&P India LargeMidCap	75.0%
India mid-/small-cap	S&P India SmallCap	12.1%
Mexico equity	S&P/BMV IRT +35.2%	75.6%
Brazil mid-/small-cap	S&P Brazil BMI +32.2%	58.0%

Share of active equity funds underperforming their benchmark, calendar year 2025. Sources: SPIVA U.S., Canada, Europe, India, and Latin America Year-End 2025.

Key Takeaways

In 2025, 79% of active large-cap U.S. funds underperformed, up from 65% in 2024 and 60% in 2023, the fourth-worst year in 25 years of scorecards.¹
Smaller-cap managers fared better, but often by drifting into larger names: only 55% of mid-cap and 41% of small-cap funds underperformed their weaker benchmarks.¹
Canada was brutal at 93.4% underperformance against a 31.7% index, while Indian mid- and small-cap funds were the rare arena where the majority beat the benchmark.⁶

Long-Term Average Fund Returns by Region
Single-year results swing widely, so long-horizon averages tell the cleaner story. The table shows 10-year annualized average fund returns against each market benchmark. Most regions trail, and the exception again is Indian small-caps.⁴

Market (10-yr annualized)	Average fund return	Benchmark return
U.S. domestic equity	10.98%	14.46%
Canada equity (asset-wtd)	9.79%	12.66%
India large-cap (equal-wtd)	13.21%	14.68%
India mid-/small-cap (equal-wtd)	17.18%	16.47%
India composite bond (equal-wtd)	6.44%	7.87%

10-year annualized average fund returns versus benchmark, periods ending Dec. 31, 2025. Sources: SPIVA U.S., Canada, and India Year-End 2025.

Key Takeaways

S. funds returned 10.98% over the decade against 14.46% for the index, a 3.48-point annual drag.¹
Canadian funds trailed by nearly 3 points (9.79% vs. 12.66%), reflecting a concentrated benchmark with little room for stock-picking.⁴
Indian mid- and small-cap funds beat their benchmark over a full decade (17.18% vs. 16.47%), the kind of result thin analyst coverage in emerging markets can still reward.⁶

Bond Fund Returns: Thinner Margins, Same Pattern
Fixed income funds form the ballast of most portfolios, and their returns track interest rates closely. Managers showed real agility in recent volatility, yet a full decade still erodes their edge once fees apply.¹¹

European bond category	Top quartile (annualized)	Third quartile (annualized)
Corporate bond, EUR (10 yr)	1.66%	0.93%
Government bond, EUR (10 yr)	0.15%	-0.40%
High-yield bond, EUR (3 yr)	8.43%	6.73%

Quartile returns for euro-denominated bond funds. Source: SPIVA Europe Year-End 2025.

Key Takeaways

In 2024’s rate whipsaw, active U.S. fixed-income managers beat their benchmark in 11 of 16 categories by timing duration and credit.¹¹
Over 10 years the math turns: the top quartile of euro government bond funds returned just 0.15% per year, and the bottom quartile destroyed capital at -0.40%.⁵
In India, 96.5% of composite bond funds trailed their benchmark over a decade. For most investors, the bond sleeve is a place to control cost and duration, not to chase a star manager.⁶

The Behavior Gap Costs Investors Over a Point a Year
A fund’s published return is a ceiling, not a guarantee. The investor return, measured in dollars, accounts for when shareholders buy and sell. Because investors tend to buy after rallies and sell during panics, they capture less than the funds they hold.⁸

Period	Average investor return	Fund / index return	Gap
10 yrs to Dec 2024 (all funds)	7.0%	8.2%	-1.2 pts
2022 equity	-21.17%	-18.11% (S&P 500)	-3.06 pts
2024 equity	16.54%	25.02% (S&P 500)	-8.48 pts
2025 equity	17.16%	17.88% (S&P 500)	-0.72 pts
2025 fixed income	2.41%	7.30% (Bloomberg Agg)	-4.89 pts

Average fund investor return versus fund or index return, by period. Sources: Morningstar Mind the Gap; DALBAR QAIB 2024, 2025, and 2026 reports.

Key Takeaways

Over the decade ending December 2024, the average dollar earned 7.0% while the funds returned 8.2%, a 2-point annual shortfall from poor timing.⁸
In 2024, gains arrived fast and narrow, so investors who waited in cash missed an 848-basis-point stretch of the rally, the second-largest gap of the decade.⁹
The 2025 equity gap narrowed to 0.72 points, but that was mostly luck as a rebound rewarded heavy selling; the 2025 fixed-income gap widened to 4.89 points.¹⁰

Equity Fund Fees Keep Falling
Fees are deducted from net asset value every day, so they compound against you. The encouraging news is that costs keep dropping under pressure from index funds and ETFs.¹²

Equity fund expense ratio	2024	2025
Simple average	1.10%	1.09%
Asset-weighted average	0.40%	0.40%
IRA equity assets in funds under 1.00%	n/a	93%

Equity mutual fund expense ratios. Sources: ICI 2025 and 2026 Fact Books; ICI, The Economics of Providing 401(k) Plans and IRAs.

Key Takeaways

The simple average equity expense ratio was 1.09% in 2025, but the asset-weighted average, what investors actually paid, was just 40%.¹²
That 69-point gap shows most money now sits in the cheapest funds; inside IRAs, 93% of equity fund assets are in funds charging under 1.00%.¹⁴
Equity ETFs drew $840 billion of net inflows in 2024 while equity mutual funds shed $655 billion, a structural shift toward lower-cost, more tax-efficient vehicles.¹²

Advisory Fees Decline as Your Wealth Grows
The data above points to a clear conclusion for investors in the $1 million to $10 million range: chasing last year’s top fund rarely works, low costs reliably help, and the largest controllable risk is mistimed buying and selling. Advisory fees themselves follow a tiered, declining schedule as assets grow.¹⁶

Investable assets	Typical annual AUM fee	Notes
Under $1M	1.00% – 1.25%	Highest tier
$1M	~1.02% median	62% of advisors charge 1% or more
$1M – $2M	0.85% – 1.00%	Breakpoints begin to apply
$2M – $5M	0.75% – 0.85%	Only 32% charge 1% or more at $2M
$5M – $10M	0.50% – 0.65%	Graduated breakpoints
Over $10M	0.50% or less	Institutional-style pricing

Representative advisory fee schedule by wealth band. Sources: Fuchs Financial; Kitces.

Key Takeaways

A $1 million portfolio carries a median fee near 1.02%, with 62% of advisors charging at least 1%.¹⁶
Above $2 million the typical rate falls toward 0.75%, and above $5 million it often reaches 0.50% or less as breakpoints apply.¹⁶
A tiered schedule that declines as assets grow aligns the advisor’s incentive with the client’s long-term growth.

Advisor-to-Client Ratios Shape How Much Attention You Get
Fee level is only half the question. The other half is how many clients share an advisor’s attention, which shapes how much planning each relationship receives.¹⁸

Advisor model	Typical clients per advisor
Industry average (Cerulli)	About 150
Median U.S. advisor (Dimensional 2025)	235 households
Wirehouse / national broker-dealer	250 – 300 households
High-net-worth-focused practice	50 or fewer

Advisor-to-client ratios by model. Source: SmartAsset, citing Cerulli and the 2025 Dimensional Global Advisor Study.

Key Takeaways

The industry average is roughly 150 clients per advisor, and the median U.S. advisor serves 235 households.¹⁸
At wirehouses the load climbs to 250 to 300 households, leaving less time for the planning conversations that matter at higher asset levels.¹⁸
Practices built around high-net-worth households deliberately cap relationships near 50, buying far more planning time per client.¹⁸

Service Inclusion Scorecard
Most investors assume their advisor handles the full picture. The data says otherwise. In BlackRock’s 2025 survey of 1,000 advisors, many core planning services are far from universal. The scorecard compares industry inclusion rates with a true all-in-one model that bundles planning, tax, and advanced strategies under one coordinated fee.¹⁹

Service	Share of advisors who include it	All-in-one model ($1M-$10M)
Investment management	Standard	Included
Tax-loss harvesting	81%	Included
Estate planning	67%	Included
Customized retirement planning	64%	Included
Charitable giving strategy	60%	Included
Intergenerational / legacy planning	58%	Included
Concentrated stock solutions	57%	Included
Tax planning as a core portfolio driver	17%	Included

Service inclusion scorecard. Industry rates from the BlackRock 2025 Advisor Trends Survey via WealthManagement.com.

Key Takeaways

Only 67% of advisors offered estate planning and 64% offered customized retirement planning; just 17% treated tax planning as a core driver of portfolio construction.¹⁹
Advanced needs such as intergenerational planning (58%) and concentrated stock solutions (57%) are included by little more than half of advisors.¹⁹
An all-in-one model closes the gap by coordinating investment management, tax, planning, and insurance under one relationship and one fee.

Implications for Investors With $1M to $10M
The data paints a clear picture. The average mutual fund return is lower than most headlines suggest once you account for benchmarks, fees, and behavior. Over 20 years the typical U.S. equity fund trailed its index by more than two and a half points a year, and the average investor gave back another 1.2 points to poor timing. You cannot control the market, but you can control your costs and your discipline.

These are not problems a single fund solves. They require a coordinated view of your complete financial picture: your income trajectory, your tax brackets, your outstanding debts, your insurance coverage, and your long-term goals. That coordination is exactly what comprehensive financial planning delivers, and it is where the right advisor relationship earns its keep, by keeping a plan on track when emotions run high.

YTS Wealth Management serves clients in the $1 million to $10 million range with financial planning, tax strategy, and insurance handled in-house, all coordinated under one tiered fee that declines as your wealth grows. The model is built around the two forces the data shows matter most: keeping costs low through a low-cost asset allocation approach, and keeping clients invested through volatile markets so the behavior gap never opens.

Ready to see how your returns compare? Schedule your Financial Planning consultation with YTS Wealth Management to build a strategy designed for where you are today and where you want to be decades from now.
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