Skip to Content
Fund Spy

A Look Back at 4 Unpopular Picks

Patience is rewarded for sticking with these former laggards.

Mentioned: , , , ,

The most commonly asked questions about our Analyst Ratings inevitably involve instances when ratings appear to be out of sync with trailing three-year returns. We tend to take a longer-term view, and experience tells us that three-year performance can flip very quickly. But that doesn't mean we're oblivious to returns. Rather, we're more focused on returns in the time period since the manager took over and on how the fund performed in various market environments.

To illustrate our approach, I dusted off the July 2007 issue of FundInvestor and pulled four of the Analyst Picks with the worst relative performance in trailing three-year returns and a manager tenure of at least three years. I then looked at the ensuing five-year returns and our current rating. Of the four, all outperformed during the ensuing five years. Two are rated Gold, one Silver, and one Neutral.

Russel Kinnel has a position in the following securities mentioned above: AWSHX. Find out about Morningstar’s editorial policies.