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Since the market is dominated by professional managers, the average fund manager will earn the index return, minus costs.
In the five years to June, the conventionally calculated average return of emerging-market funds was 23.9%, well below the index return of 27.4%.
All stocks must be owned by someone so the index return is equal to the performance of the average investor, before costs.
But after the first year, the index's higher income payout would push its total return back into positive territory, and in 2.5 years the index return would pull even with the money market; their cumulative gains would be 8percentt.
Source: finance.yahoo.com 27 IXIC NASDAQ composite index return in day t-1.
Source: finance.yahoo.com 26 DJI Dow Jones Industrial Average index return in day t-1.
Similar(36)
The Lehman Brothers Treasuries index returned 8.1percentthroughgh the third quarter.
In contrast, the Standard & Poor's 500-stock index returned 14.7percentt, including dividends.
The country's stock market advanced, too, with the benchmark Bovespa index returning more than 80 percent.
THE Standard & Poor's 500-stock index returned nothing in 2011, but a lost year overshadowed a late rally.
(By contrast, the Standard & Poor's 500-stock index returned 5.5percentt last year and 12.7percentt, annualized, over the five-year span).
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