Who Is Really in It for the Long Haul?
Most investment shops reward managers for short-term results, and few consider performance beyond five years.
A version of this article was published in the February 2016 issue of Morningstar FundInvestor. Download a complimentary copy of FundInvestor here.
Morningstar has consistently stressed that shareholders of actively managed mutual funds must maintain long-term investment horizons. Short-term market fluctuations can cause even the most skilled managers to perform out of step with competitors at times. It's more likely that talented managers can identify long-term drivers of value, and investors should prepare to wait patiently for their theses to play out.