U.S. News and World Report
provides more context on the numbers of mutual funds that fail every year.
's founder, Jack Bogle
, has been very vocal about the large number of mutual funds that fail every year, or as Bogle says, "die." But the reality of what is happening with the failure of mutual funds is much more nuanced, the magazine writes.
Many funds are "dying' each year, around 7 percent each year between 2001 and 2012, yet the number of funds replacing them is higher. There were 7,238 mutual funds at the end of 2012 compared to 6,876 at the of 2000. Many funds created in the tech bubble made esoteric risks or chased fads, bringing them to their demise, Rob Silverblatt asserts.
The fact that a greater number of mutual funds are replacing the failed ones creates "survivorship bias" giving us a skewed idea of how well the mutual fund industry is doing.
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