Which Funds Have the Best Manager Records?
Mutual fund performance data is quite useful, but you need the right perspective.
A version of this article originally appeared in Morningstar FundInvestor.
Short-term returns tell you something about when a fund prospers and when it loses money, but you have to go long to judge a manager's skill. In fact, you should go as long as possible--the ideal range is from the time a manager becomes lead manager through the current date. Emotions tell us that the most recent results are somehow more meaningful, but science says you want as many observations as possible. Even the trailing 10-year returns are shedding the 2000-02 bear market.
Russel Kinnel has a position in the following securities mentioned above: VHCOX, OAKLX, POAGX, MAPIX, ARTGX. Find out about Morningstar’s editorial policies.