Given that it is hard to believe mutual fund investors experience little over half the returns
delivered by their funds, let us illustrate the above phenomenon with a hypothetical example: In
Year 1, mutual fund "Red Hot" is small, has 10,000 shareholders, and returns 35%. As a result
of its good performance, Red Hot attracts new money and, in Year 2, has 50,000 shareholders.
As a consequence of its larger size, however, the fund delivers only 5% in Year 2....