How much average return from mutual fund?

Suppose Stock market crashed..... like 2000 points down.... what does it affect on mutual fund.......

- 10 years 1990 through 1999, the average stock fund gained 23.6% per year. $10,000 invested grew to $83,194
- The S&P 500 gained an average 28%, and $10,000 invested grew to $118,074 in the same 10 years.

And the range of stock market annual return for the past 50-years is in the range of 5.7% - 7.7%/yr.

I'm not sure I understand the question. Are you asking what the total return of a U.S.-equity mutual fund would be if the Dow Jones Ind. Average suddenly went down by 2000 points?

2000 points is roughly a 15%. The fund in question most probably won't track the Dow, but the S&P 500, or be composed of shares selected by a manager (if it is actively managed). I'm assuming here that it is a large-cap U.S. equity fund. You can roughly approximate its asset value movements using the Dow, but the error will probably be of some percentage points.

So lets say that the fund would lowers by a 15% too. If you want to know the year to date total return, consider that the market has gone up by about a 10% so far, so much of that decrease will be compensated by previous profits (supposing you held the fund in the past).

If you want to know the return at the end of the year, who knows what would happen with stock prices after such a downturn... You would need to include that future return in the equation, substract the fund's expenses, and add the return provided by yield (which was lately of about a yearly 1,75% but would probably go down if stocks underperform as in the hypothesis we're using).

To summarize, it wouldn't be too terrible, but it would leave us empty handed for 2007 so far, with a little loss. More important would be to know what would happen afterwards, if there would be a rebound or what.

Bear in mind that the Dow has been doing better that the general large-cap market (which is measured better by the S&P 500) these last months of high uncertainity, and it may do better in a crash as it includes larger companies, so the situation for the fund might be a little worse than the evolution of the Dow.

Hope it helps. Cheers