The average dollar invested in US mutual funds and exchange-traded funds earned 8.7% annually over the trailing 10 years ended Dec. 31, 2025. That’s about 1.2 percentage points per year less than these funds’ 9.9% aggregate annual total return over that span, equivalent to about 12% of the funds’ aggregate return.
That gap is not due to the funds’ performance; it reflects the timing and size of investors’ purchases and sales.
On a positive note, the average dollar invested in US stock funds and ETFs gained 12.8% per year, just shy of the funds’ 13.3% aggregate annual return over the 10-year period. In other words, investors captured virtually all of those funds’ returns, a great outcome.
That’s the bad news/good news story from the 2026 edition of our long-running Mind the Gap study. In it, we estimate the return of the average dollar invested in US funds and ETFs and…
