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Commentary

Mistakes to Avoid When Selecting a Large-Growth Fund

Go beyond total returns and dig into the nuances of the category.

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Let’s say you’re fed up with a large-growth mutual fund you’ve held for umpteen years. You’re sick of watching it trail its peers during a fantastic market for growth stocks, and you’ve finally decided to pull the plug. How will you go about choosing a new fund?

You could just look at trailing returns and pick one of the best-performing funds of the past year or five years, but that’s a lazy and ineffective method, as you surely know (top performers from a recent past period often revert to the mean and underperform in the future).

Josh Charlson does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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