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To: mister topes who wrote (2134)	11/19/1998 9:06:00 PM
From: Investor2	Read Replies (2) of 15132

As a further follow-up to our discussion on the performance of index funds vs. general equity funds, so far I have obtained the following data from the Vanguard site: S&P 500 % Funds Annual Outperformed by Year Gain Index 1972 85 1973 84 1974 47 1975 71 1976 56 1977 15 1978 6.5% 31 1979 18.4% 20 1980 32.4% 53 1981 -4.9% 37 1982 21.5% 38 1983 22.5% 60 1984 6.3% 78 1985 31.8% 74 1986 18.7% 76 1987 5.3% 76 1988 16.6% 59 1989 31.7% 82 1990 -3.1% 64 1991 30.5% 45 1992 7.6% 46 1993 10.1% 40 1994 1.3% 78 1995 37.6% 85 1996 23.0% 75 1997 33.4% 95 Average 17.4% 60 Std. Dev.13.1% 22 The first column is the year. The second column is the total annual gain of the S&P 500 for each year. (Note that I am missing S&P 500 performance data for 1972 through 1977.) The third column is the percentage of general equity funds that the Vanguard S&P 500 Index Fund outperformed. A review of the above data shows: -the index fund outperformed an average of 51% of managed funds during the two years that the market went down. -the index fund outperformed 78% of managed funds the year the market rose between 0 to 5%. -the index fund outperformed an average of 58% of all funds during years when the market was up 5 to 10%. -the index fund outperformed 40% of general equity funds the year the market went up between 10 and 15%. -the index fund outperformed an average of 52% of equity funds during years when the market went up between 15 and 20%. -the index fund outperformed an average of 67% of equity funds during years when the market went up more than 20%. -the index fund outperformed an average of 60% of equity funds during years when the market either went down or went up less than 5%. Based on the data I have collected so far, it does not appear that it is statistically correct to say that the outperformance of index funds is limited to years when the market is up. Does anyone else see a trend in the numbers or have additional data? Best wishes, I2

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