Are good fund managers really just lucky?
Do fund managers get better over time? Apparently not, according to recent research by Bryant University professor Jack Trifts.
According to Trifts and colleague Gary Porter, even the best solo fund managers, in the United States at least, falter the longer they stay in the game.
And, while fund companies don't tout star power here as much as they do across the border, there's little reason to suggest that Canada is really much different.
The academics’ other findings are:
- Solo fund managers who survived more than 10 years were likely to have done better or at least matched the market in their first three years;
- Although each of the very best managers generated decent returns following those first three years, the majority were not able to maintain that level of initial performance;
- The longer the best solo fund managers managed a fund, the poorer their average annual performance.
“We think this occurs because ‘superior performance’ is really just random luck,” Trifts explains. “Fund managers who have high performance early in their careers are branded stars while those with poor performance tend to disappear from the industry.”
The researchers looked at results spanning more than 80 years to identify the best solo mutual fund managers and the keys to their success, matching their performance and tenure within the nine Morningstar styles.
By Gordon Powers, MSN Money
Posted by: paul banks | Jun 18, 2021 8:53:02 AM
it is the same old story if u throw sh-t at a wall some of it is bound to stick and remember they are - like your gov.-its called SOPM--SPENDING OTHER PEOPLES MONEY ---------------------------------------SIGNED --JUST A DUMB MARITIMER-------
Posted by: Do. John | Jun 18, 2021 3:05:32 PM
Posted by: SP | Jun 19, 2021 10:36:04 PM
“We think this occurs because ‘superior performance’ is really just random luck,”
And this my friends is the way that the stock market works for most. Unless you are like JP Morgan, Goldman Sachs etc and the market just 'magically' moves in your favour time after time after time.
It's clearly all down to skill and NOT luck, manipulation, insider trading, backhanders, and fraud.
Please note that I did say that it was *NOT* down to the latter.
Posted by: ray larder | Jun 21, 2021 8:28:54 PM
Then why are they paying the CEO's of the 5 BIG banks in Canada $10,000,000 dollars a year each ?
I always knew they were guessing, yep they are still making $10,000,000 dollar saleries even though the markets loss money while they are in charge.