Tuesday, July 11, 2006

Mutual Funds Improve

Interesting article about improving performance of mutual funds. I've posted a couple of times about how actively managed funds seem to do better than passively managed funds in weaker stock market conditions and vice versa. Last night I was checking out the performance of TIAA-CREF's variable annuities (these are basically mutual funds - not the standard variable annuities). Over a 10 year horizon their indexed stock fund has essentially performed the same as their actively managed Stock Fund. But in the last year the actively managed fund has strongly outperformed the indexed fund. Their Growth Fund however has totally underperformed over every time horizon. But interestingly their best fund of all is the TIAA Real Estate Fund which invests directly in real estate. It has outperformed the equity funds on every time horizon. Currently my TIAA-CREF account is invested in the Real Estate Fund and the Bond Fund.

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