Mutual Funds: Squeaking Past The Index Funds

Most portfolio managers didn't come close, of course. But a few have found a way

In each of the past four years, the highly trained and richly compensated folks who manage U.S. mutual funds have been humbled, if not humiliated, by the funds that blindly buy the stocks in the Standard & Poor's 500-stock index. And this year is no exception. In the first five months of 1998, the average U.S. diversified equity fund earned a shade under 9%, vs. a little more than 13% for the S&P 500, according to Morningstar Inc.

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