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Rekenthaler Report

The Toughest Investment Task

Selecting actively managed U.S. stock funds.

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Steep Odds
All right, perhaps that is an exaggeration. There surely must be a more difficult investment task than finding an active U.S. stock fund manager who is likely to outperform the stock market indexes over the next decade, after expenses.

I don't happen to know what that is, however. Whether academic studies, industry research, or Morningstar's Fund Manager of the Year selections, all results point to the difficulty of identifying consistently successful U.S. stock managers. The academic findings have been pessimistic, industry studies have echoed that note, and, while Morningstar's International-Stock Fund Managers of the Year have mostly gone on to great things and Morningstar's Fixed-Income Fund Managers of the Year on to good things, Morningstar's Domestic-Stock Fund Managers of the Year have looked distinctly ordinary after the fact.

John Rekenthaler has a position in the following securities mentioned above: BRK.B. Find out about Morningstar’s editorial policies.