Investor Returns Hurt by Attempts to Time the Market

The average investor has lagged behind the average fund for the past 10 years, writes Russel Kinnel, Director of Mutual Fund Research at Morningstar. The reason, he says, is that “in aggregate, investors’ timing is not very good.” Kinnel cites data showing that, for the ten years ending 2016, the average investor saw mutual fund returns of 3.96% even though the average return for those funds was actually 4.33%. Kinnel points out that there are many different factors at play–for example, he says, two funds “doing the same thing might have different investor returns just because they are in different […]

Not All Active Managers Created Equal

As investors continue to divert dollars from actively managed funds to lower-cost passively managed index funds, research conducted by two finance professors at Pace University has revealed an interesting finding, according to last week’s Wall Street Journal. The study found that diversified emerging-markets funds that are actively managed are more likely to outperform their less actively managed peers as well as index funds. Matthew Morey and Aron Gottesman, finance professors at Pace University’s Lubin School of Business in New York, tracked the 67 U.S.-based actively managed emerging markets funds in the Morningstar database from 2009 through the end of 2014 […]

More Fund Managers Snatching Up Bargains

Money has been flowing out of mutual funds at an incredible rate in the past year, but three well-known fund managers see opportunity in the flight from stocks, BusinessWeek’s Tara Kalwarski writes. Kalwarski interviewed John Rogers of Ariel Fund, David Herro of Oakmark International Fund, and Tom Marsico of Marsico Focus Fund, and found that all are responding to big losses last year by doing quite a bit of bargain hunting right now. Rogers’ fund is worth half of what it was a year ago, but he has a track record of emerging strong from crises; in the year after […]