In my recently published article on Morningstar Investor Returns, I noted that funds with low standard deviation relative to their category group tended to have higher investor returns and smaller gaps with official returns.
The reasons are fairly obvious. Less-volatile funds don't cause a lot of fear or greed. Even setting emotions aside, if you choose any random day to invest, timing is less important for a less-volatile fund. It's good to seek these funds out when the bull market is so long in the tooth because they won't likely jump off the screen amid all the strong returns from more-volatile funds.
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Russel Kinnel has a position in the following securities mentioned above: JENSX. Find out about Morningstar’s editorial policies.