A long losing streak in a share-market benchmark is a record of what that index did over a defined period—not a forecast of what it will do next, and not by itself a signal to change your investments. To interpret it, first identify the benchmark, the dates and the return measure, then check whether it is relevant to your fund and your own goals.
What does a benchmark losing streak actually tell you?
A benchmark is a comparison standard for an investment strategy or market segment. An index represents that market or segment according to a set of rules; it is not the same thing as an investor’s portfolio. Vanguard notes that an index cannot be invested in directly. A fund that tracks one has expenses and may differ from the index because of tracking differences, holdings, timing and cash flows.
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The phrase “losing streak” is incomplete without the index and dates. It could mean consecutive days, weeks, months or years of losses, and the result could refer to price changes alone or total return, including reinvested distributions. Magnitude matters too: a series of small declines is not equivalent to a deep fall. Without those details, no specific streak or drawdown can be verified.
- Name the benchmark: for example, the index or market segment the report is measuring.
- Set the dates: establish the start and end of the period and what counts as consecutive losses.
- Check the return definition: determine whether the figure is a price return or total return, and whether distributions are included.
- Understand the index: its composition and rules affect what its performance represents.
How should you compare a fund with its benchmark?
Start with the fund’s mandate and exposure, not whichever index has recently performed best. An index fund should be assessed against the index it tracks. An active fund should be compared with its stated, appropriate benchmark. The comparison is meaningful only if both represent comparable exposures—for example, in geography, asset class, investment style and mandate.
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An index’s theoretical return is not the fund investor’s realized return. Fund expenses and tracking differences can cause results to diverge. For an active fund, one short period of lag is not enough to establish that the manager has failed; a persistent shortfall against a suitable benchmark is a reason to investigate the fund and its fit with your plan. Vanguard says investors may consider looking for a similar, more successful fund when active-fund underperformance persists, provided the alternative is genuinely comparable.
- Confirm the fund’s stated benchmark and whether it fits the fund’s actual strategy.
- Compare like with like over a relevant period, using the same return basis where possible.
- Account for fund expenses and tracking differences before interpreting a gap.
- For an active fund, assess sustained performance rather than treating a single interval as a verdict.
Does a losing streak mean you should change your investments?
Not on its own. A benchmark’s decline does not show that every fund or investor has lost the same amount, and it does not determine when a recovery will begin. The right response depends on the investment’s purpose and risk, as well as your goals, time horizon, liquidity needs and ability to bear losses. A downturn is a reason to check whether your plan still fits—not a blanket instruction to hold every investment indefinitely or to sell.
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Historical results can help put volatility in context, but they cannot promise a particular outcome. Vanguard reports 13 global equity bear markets since 1972; that is its count under its own definition, not a prediction of how often future bear markets will occur. Vanguard also presents S&P 500 annualized returns for 1973 through 2024, based on its calculations using Refinitiv data; the chart is described as of December 31, 2024. Neither historical record tells an investor what the next return will be. Vanguard’s guidance is: “Past performance is not a guarantee of future returns.”
J.P. Morgan Asset Management reports that, on its stated historical data basis, annual stock returns since 1950 ranged from +47% to -39%. It also says a stock-and-bond blend had no negative return in any five-year rolling period in the past 70 years on that same page’s data basis. Those are source-specific historical observations, not a guarantee for an individual investor or a particular portfolio.
What fund-underperformance figures do—and do not—show
Fund scorecards answer a different question from whether a benchmark has been falling: they compare funds with assigned benchmarks. Vanguard attributes the following results to the S&P Dow Jones Indices SPIVA U.S. Scorecard for the five years ended June 30, 2025:
| Fund category | Share that underperformed assigned benchmarks |
|---|---|
| U.S. stock funds | 88% |
| International stock funds | 79% |
| Emerging-market stock funds | 78% |
| Global stock funds | 90% |
| General investment-grade bond funds | 51% |
These figures concern fund performance relative to assigned benchmarks over that specific five-year period. They do not describe benchmark losses, establish that a particular fund will underperform, or guarantee that an active fund will continue to lag.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Questions to ask before acting
- Which exact index and dates does the reported streak cover?
- Is the figure a price return or total return, and are reinvested distributions included?
- Does the benchmark match the fund’s geography, asset class, style and mandate?
- Could fees or tracking differences explain some of the gap between a fund and its index?
- Have your goals, time horizon, need for liquidity or ability to bear losses changed?
Keeping performance in the context of a long-term plan and using diversification can help prevent short-term results alone from driving decisions. Any change should still reflect the investment’s actual purpose and risks and your circumstances.
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Sources
- Vanguard: What is an index?
- Vanguard: How to stay the course in volatile markets
- Vanguard: Does active management pay?
- Vanguard: Long-term investing
- J.P. Morgan Asset Management: Guide to the Markets
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