In any given year, only about one-third of equity mutual funds match the performance of their benchmark indexes. In fact, the average equity mutual fund lags its benchmark by about 2% annually. Because ETFs are designed to track the performance of well-established indexes, rather than to actively strive for outperformance, they make it possible for you to benefit from a well-diversified portfolio that is not subject to the whims and historical inconsistency of most active managers.
|1,446 Large Cap Blend Mutual Funds vs the S&P 500 Index|
10 years ending Oct 2004
|1,411 Mutual Funds Under Performing the S&P 500 Index
|35 Mutual Funds Out Performing the S&P 500 Index
Source: Morningstar, Twincities.com
Taken from: "The Daunting Odds of Stock Picking", Index Funds Advisors, Inc.