The Longest Winning Streaks Among Our Rated Funds
Eight funds with Morningstar Analyst Ratings that have beaten their category averages for at least 10 straight years.
Long winning streaks are rare and therefore worth noting. I recently screened Morningstar's database of rated funds for stock, bond, alternative, and balanced funds that have finished each of the past 10 calendar years and the year-to-date period ended Sept. 8, 2014, in the top half of their categories. There weren't many--just eight.
Three of the funds were cheap U.S. equity index funds. Consistency is one of passive investing's many selling points. Low costs and wide diversification have proven to be a hard combination for most active managers to beat over the long term. It's telling, however, that two total stock market index funds and another large-cap index fund that includes a larger helping of mid-cap stocks made the cut in the large-blend category rather than funds that track the more talked-about S&P 500 Index. Vanguard Total Stock Market (VTSAX) and Fidelity Spartan Total Market (FSTMX), which have earned Morningstar Analyst Ratings of Gold, benefited from tracking indexes--the CRSP US Total Market Index and the Dow Jones US Total Market Index, respectively--that own more small- and mid-cap stocks, which have outperformed their larger brethren over the past decade.
Dan Culloton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.