S&P: Top funds failed to repeat

Jan 29, 2007 @ 12:52 pm

By Kathie O’Donnell

Standard & Poor’s latest mutual fund persistence scorecard, which measures the consistency of top mutual funds, showed that in 2006 “very few” funds consistently managed to repeat top-half or top-quartile performance.

For the five years ended Dec. 31, just 13.2% of large-cap, 9.9% of mid-cap and 10% of small-cap funds maintained a top-half ranking over five consecutive 12-month periods, S&P, a unit of New York-based The McGraw-Hill Companies Inc., said.

Just 3% of large-cap, 2.5% of mid-cap and no small-cap funds maintained a top-quartile ranking over the same period, S&P said.

“Standard & Poor’s research suggests that screening for top-quartile funds, as the sole basis for an investment decision, is inappropriate,” Srikant Dash, index strategist at Standard & Poor’s, said in a statement.

Few funds repeat a top-quartile performance, he said.

“Standard & Poor’s research shows that a healthy percentage, and in most cases a majority, of top-quartile funds in the future will most likely come from the ranks of prior period second and third quartiles,” Mr. Dash said.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

Transamerica's Boan: Crafting better retirement income conversations

Retirement income is a challenge for investors. How can advisers have better conversations about retirement income? Transamerica's Joseph Boan offers insights and tips for advisers.

Latest news & opinion

What's in a name? For TCA by ETrade, everything

Trust Company of America is gone, and there's big buzz over the name change. But turning the custodian into an industry powerhouse will take a lot longer — if it happens at all.

When it comes to regulating AI in financial services, murky waters are ahead

Laws are unclear on how the technology fits in with compliance.

As Ameriprise case shows, firms on hook when brokers go bad ​

The SEC will collect $4.5 million from the brokerage firm for failing to supervise brokers who were ripping off clients.

10 highest paid professions in America today

These are the top-paying jobs in the U.S., according to Glassdoor.

Ameriprise to pay $4.5 million to settle SEC charges that five reps stole more than $1 million from clients

Agency censures firm for not protecting clients from thieving brokers.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print