Ouch! Those Measly Fund Returns Hurt

Only Net and large-cap funds soared in the first quarter

If you do most of your investing through mutual funds, you don't have much reason to celebrate the Dow Jones industrial average busting through 10,000 on Mar. 29. The average U.S. diversified equity fund earned a total return of just 1.15% (including reinvestment of dividends and capital gains) this year, vs. a 9% price gain for the Dow. If anything, the hoopla around the 30 Dow stocks was just a painful reminder of the increasing narrowness of a market in which more and more of the gains are concentrated in fewer and fewer stocks.

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