Lipper Indexes

Think: the judgy part of Santa. Who's been naughty? Who's been nice? (In the mutual fund industry.)

One fund apes the S&P 500. Well, the S&P 500 was up 8.7% this year. 2.8% was paid out in dividends. So all in, the SPX was up 11.5% this year. But the average Lipper fund was up 10.5%.

Hm. Odd. And interesting. Why would we even want an index like this, i.e. one that tracked the second best performers?

Well, mutual funds' performance didn't always suck so relatively bad. Until the modern age (last 25 years or so), mutual funds beat index funds...often. But mutual funds paid brokers a lot of commish. And they paid the banks a lot of commish. And they became a stalwart part of American retirement.

Lipper delivered numbers that marked which funds in a wide range of categories (growth, growth and income, income, hybrids, etc.) had been good, bad, or ugly during the year. And still does.