June 6, 2023

Bad News: The Large-Cap Mutual Fund You Own Is Probably Underperforming

Many pro money managers are having a tough time this year.

Both hedge funds and mutual funds have lagged the S&P 500’s strong gains in 2023, according to Goldman Sachs. The bank estimates the average large-cap core mutual fund has returned 7%, while the S&P 500 is up 11%.

Goldman Sachs estimates that only 30% of large-cap funds are beating their benchmarks. It attributed some mutual funds’ underperformance to their relatively smaller positions in stocks like Apple, Microsoft, Google parent Alphabet, Amazon, Nvidia and Meta.

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