Stats › Active, passive and flows › The behaviour gap
The behaviour gap is 1.2 points a year, and the firm that publishes it says not to read it as dumb money
| Group | Investor return | Fund return | Gap |
|---|---|---|---|
| Overall, excluding funds of funds | 8.7% | 9.9% | -1.2 |
| US equity | 12.8% | 13.3% | -0.4 |
| Sector equity | 9.4% | 10.6% | -1.2 |
| International equity | 7.8% | 8.9% | -1.1 |
| Allocation | 7.8% | 8.4% | -0.7 |
| Taxable bond | 1.9% | 3.0% | -1.0 |
| Municipal bond | 1.1% | 2.2% | -1.1 |
| Alternative | 2.6% | 4.1% | -1.6 |
Ten years ended 31 December 2025. The investor return is an internal rate of return on pooled net assets plus monthly flows, and the fund return is time weighted. Commodity funds are excluded from the study entirely. No significance tests are reported. The publication's cover date of 6 August 2026 and its page headers reading 5 August 2026 disagree.
Over the ten years to December 2025 the average dollar in American funds earned 8.7 per cent a year against 9.9 for the funds themselves. The publisher states this is not a proxy for the average investor's return and that good practices can open a gap.
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