Investing

Active Share and Mutual Fund Performance

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  • Jul 26th, 2012 9:42 am
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Dec 20, 2009
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Active Share and Mutual Fund Performance

I'm a 24 year old new grad looking to start my investments, I've read the books (Berstein, Bogle) and online resources on index investing and was pretty set on doing that. But I stumbled upon this and I was wondering what you smart people think:

http://papers.ssrn.com/sol3/papers.cfm? ... id=1685942

Is it actually possible to pick "winning" mutual funds that beat the index after fees/expenses?
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Deal Addict
Jul 23, 2007
3599 posts
1419 upvotes
sansera wrote:
Jul 26th, 2012 4:55 am
I'm a 24 year old new grad looking to start my investments, I've read the books (Berstein, Bogle) and online resources on index investing and was pretty set on doing that. But I stumbled upon this and I was wondering what you smart people think:

http://papers.ssrn.com/sol3/papers.cfm? ... id=1685942

Is it actually possible to pick "winning" mutual funds that beat the index after fees/expenses?
A few managers will. We just don't know which ones. A lot of it has to do with investor behaviour as well. Too many investors only want to buy when stocks are going up, and sell when they go down.

Bill Miller was a prime example.

The latest casualty is Ken Heebner who had a great winning streak in the 80's and 90's and has faltered since.

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