I agree with BobC on the broad points, but have nits to pick with the details.
Broad points:
1. Period-by-period "consistency", a la Bill Miller/Legg Mason Value, doesn't matter. What matters is long term performance.
2. Many (dare I say most, whatever that means :-) ) financial writers are either poor writers, don't understand their subject well, or both.
On that second point, the writer strategically omits mention of bond funds (also included in the S&P report), perhaps because they would undercut her thesis - no persistence of performance.
"Performance persistence levels have tended to be higher among the top-quartile fixed income funds over the past three years ending March 2015." (From the S&P report.) Not surprising, since for bond funds, cost is a huge determinant of performance, much more so than for equity funds.
Details:
1. The source of the material was stated in the second paragraph - S&P Dow Jones Indices’ Persistence Scorecard. (I've linked to the S&P Scorecard.) The research was S&P internal research. Raw data came from CRSP.
2. "Most", unless otherwise stated, may be taken to mean over half. If you look at Exhibit 2, under 1/3 of top quartile domestic funds in 2011 repeated in 2012. Exhibit 1 looks at top quartile funds from 2013; 1/4 or less repeated in 2014.
3. The consistency sought by S&P was for yearly, not quarterly performance. They just started their years in March.
4. The only consistency that one may reasonably expect is that index funds will consistently underperform their benchmarkts. Not by much, but that's the only consistent performance I expect to find anywhere.
5. All classification systems have their limitations; we've been over this ground many times. However, Morningstar and Lipper are irrelevant here, as this is an S&P report, and S&P uses its own classification system.
From S&P's Mutual Fund Guide: "Standard & Poor’s ... analyz[es] fund behavior, then classif[ies] funds into 67 different styles". This is a different methodology from M* and Lipper, in that S&P classifies based more on behaviour than on portfolio.

Not being nitpicky, but the picture of the biotech lab is pretty impressive...
The biotech companies within healthcare sector has been doing well in the last several years, not just 2015.

I did not see what research she used to write this article. "Most" mutual funds could be, what, 51% or 65% or ? This is all stuff we have heard for many years, so it is strange to me that Forbes would bother with the article. I think most of us can agree that domestic index funds provide the broadest coverage for the lowest expenses. Whether an investor chooses to add selected active-share funds is another decision. The shocking truth to the writer may be that there are more than a few active-share funds that have very strong 3 & 5 year records. Frankly, whether the fund lands in the top quartile every year for five years during a strong bull market is of little importance to me. On the other hand, as we already know (old news), there are a lot of crappy funds out there that exist only because marketing arms of fund companies continue to push them. That does not mean there are not some great active-share options. Investors just need to do their homework and accept that a great fund will not likely be in the top of its group every year. Just not possible. Add to that how funds are categorized by Lipper and Morningstar, often in what I think are the wrong asset classes, and rankings and comparisons become more difficult.

FYI: The vast majority of mutual funds have more in common with one-hit wonders than they would want you to know. The shocking truth is that most mutual funds that rank in the top performance quartile one year don’t do it again the next year nor the following year. And no funds stay in the top quartile over five years. Even worse, about a third of mutual funds die or get merged with another after five years.
Regards,
Ted
http://www.forbes.com/sites/trangho/2015/06/23/the-shocking-truth-mutual-funds-dont-want-you-to-know/print/

Great call, Scott, when GILD was below 100. I own THQ also. If you are looking for froth, FBIO (formerly CNDO) and NVAX are Jim McCamant's picks from a while ago that I still have. No dividends, of course.

Thanks! :)
Gilead ultimately didn't make sense to me from a valuation standpoint - basically the valuation had priced in a lot of bad news and basically ignored the pipeline, not to mention management's track record. While it's been frustrating it's finally taken off in the last month.
Additionally, in terms of health care, I think it's just the place to be. As I've said previously, I like to focus on "needs over wants" and healthcare is really a core of that. I think lifestyles unfortunately aren't going to change and as a result, the obesity situation (and all of the conditions that come along with that) are only going to continue to be a large theme. There's also demographics and a number of other tailwinds. I definitely own a lot of healthcare, but I sleep well at night, given that. I said in another thread, I do worry about healthcare costs (which will probably be something like 20% of GDP within 4-5 years) becoming unsustainable, but what are we going to do about it? Probably nothing, given the government's inability to really make progress in just about any important area. So, healthcare spending will continue to crowd out other things.
You also have had a great deal of innovation in biotech in recent years. While I do think some of the binary (has one medicine, does it work yes/no) biotech stocks are expensive, a lot of the larger companies are not.
I've also talked about other companies lately, including CVS (which, given the Target deal, will quickly add another 1660+ locations without having to build them) and Abbott (nutritional products, considerable exposure to EM.) I still like Celgene, which has a ton of collaborations with other various companies.

Celgene is risky and a tad volatile, but I like their considerable focus on collaborations and hopefully they can meet their longer-term projections:
"For adjusted earnings, Celgene raised 2015 guidance to the range of $4.60 to $4.75 per share, although that's below current consensus of $4.84 per share.
In his presentation, Hugin said Celgene expects to meet or exceed previous 2017 guidance, although the company is not raising that forecast at this time. The company still expected net product sales in the $13-14 billion range and adjusted earnings per share of $7.50.
New on Monday morning was financial guidance for 2020. Celgene expects net product sales to reach $20 billion and adjusted earnings per share of $12.50. Both forecasts top current consensus estimates, although the accurancy of estimates five years into the future is always a bit murky."
http://www.thestreet.com/story/13007744/1/celgene-has-2020-vision-for-long-term-growth-but-plays-safe-for-2017.html
Shire, Roche (although I hate the European one div a year instead of quarterly), Abbvie, Teva, Amgen, McKesson, Pfizer and Illumina are other things I've considered, although Illumina would be a tiny, "find it fascinating, just want to have some exposure to it" longer-term play.
In 2012, BOA/ML said: "The fight against obesity will be a major investment trend for the next 25-50 years, a report by Bank of America/Merrill Lynch said on Tuesday, listing 50 companies in areas from healthcare and pharmaceuticals to food and sports that could benefit."
If that's really the case, that's pretty dismaying. I'd like to hope we can be able to change en masse before 25+ years.
As for THQ, I own THQ and HQL. I'll be happy to collect the monthly dividend from THQ which has generally traded with around a 5-6% discount. The company announced a buyback program not that long ago. Not sure where they are with that, but with THQ where it is....

FYI: Janus Capital Group Inc. said on Tuesday it launched a total return fund that invests across global stock and bond markets, developed in part by Nobel Prize winner Myron Scholes whom the firm hired 11 months ago.
Regards,
Ted
http://www.reuters.com/article/2015/06/23/funds-janus-idUSL1N0Z90LD20150623
Janus Website JAGDX: https://www.janus.com/retail/funds/janus-adaptive-global-allocation-fund

FYI: CalPERS is taking the next step in a multi-year effort to reduce risk, cost, and complexity in our portfolio.
Regards,
Ted
http://www.ritholtz.com/blog/2015/06/targeted-investment-programs-and-manager-restructure-update/print/

FYI: Income stream made of put options is up 12.7% so far this year, triple the S&P 500.
Regards,
Ted
http://www.investmentnews.com/article/20150623/FREE/150629974?template=printart
SHAIX Is Unranked In The (MN) Fund Category By U.S. News & World Report:
http://money.usnews.com/funds/mutual-funds/market-neutral/schooner-hedged-alternative-income-fund/shaix

Ted....as the link below indicated, and I'm paraphrasing, if you don't hate at least one section of your portfolio, you are most likely not adequately diversified.
http://awealthofcommonsense.com/you-should-hate-some-of-your-investments/
My divi payers are absolutely bringing up the rear YTD...but they lead the charge the last 5 years with about an 18% annual gain.
I am adding to them while they are hated.

FYI: The recent rise in long-dated risk-free interest rates has hurt the performance of stocks that have high dividend yields. Below we have broken up the S&P 500 into deciles (10 groups of 50 stocks each) based on dividend yield. Decile 1 in the chart contains the highest yielding stocks in the S&P 500, while decile 10 contains the stocks with the lowest (or no) dividends.
Regards,
Ted
https://www.bespokepremium.com/think-big-blog/dividends-a-no-go/

FYI:
Regards,
Ted
http://www.mfwire.com/common/artprint2007.asp?storyID=52067&wireid=2

Have so much in healthcare. Added to THQ yesterday (11.2% discount to NAV), AGN doing well after adding that the other day. Looking for others.
http://www.latimes.com/science/la-sci-sn-more-americans-obese-than-overweight-20150620-story.html

FYI: You’ve probably read your share of articles pointing out how difficult it is for an investment manager to beat a broad stock index. But 2015 is shaping up to be different.
Regards,
Ted
http://www.marketwatch.com/story/actively-managed-funds-roar-back-here-are-the-best-of-2015-2015-06-23/print

This guy sounds like someone who writes about bonds, not funds. He's separated out the capital (price) appreciation (from $9.68 to $9.93) from the interest return. Look at the phrasing: it's "yielding 3.86% and sitting on a nice year-to-date [price] gain of 2.5%"
But even that is wrong. The 3.86% yield he quotes is the SEC yield that incorporates part of the price change - the portion due to market premium/discount amortization over time, but not the portion due to interest rate changes. The 2.5% price gain is a gross figure and so includes all sources of change. Thus, the amortization is being counted twice.
If he's going to separate price movement from interest payments, he should use something like trailing 30 day rate, or M*'s trailing twelve month rate, which is 3.93%.
As to the substance - junk has an equity aspect to it (if the market is improving and companies are more likely to succeed, the risk of junk defaults decreases, and so the value of junk bonds, like that of their underlying companies, goes up). So whether rising interest rates hit junk hard or not seems to depend on part on whether the market views the increase as a positive sign (companies are strong and improving), or as an impediment (companies cannot grow as easily with higher borrowing costs).

>>>High-Yield Bond Funds: Don’t make the mistake of focusing on interest rates and missing a potentially bigger problem for bond fund prices — credit risk. High-yield bond funds are providing great yields for investors in a low-yield environment and have also held up on the price side thus far in 2015. For example, one of the best high-yield bond funds, Fidelity Capital & Income (FAGIX[5]), is yielding 3.86% and sitting on a nice year-to-date gain of 2.5%. But when things turn south and the flight to safety hits the bond market, investors need to be prepared for stock-like declines. In 2008, in the midst of the last big downturn, FAGIX was hit with a 30% drop.<<<<
I could show you articles that say the exact opposite about high yield bond funds. Namely, that they hold up well when the Fed raises rates. As for his example of FAGIX, who is this guy??? The article is dated June 19 but the YTD return is 5.22%, a big % distance above the measly 2.5% mentioned.

Thanks, Ted.
For the board: Hasn't there been some bit of research which shows that, in fact, quite a few managers are skilled, and would actually do quite well if they stuck to their (say) top 30-50 ideas, rather than overdiversify and, further, if they kept their AUM reasonable ?

"Can't we all just get along?"
Another chart of interest rates since the Constitution was adopted, highlighting max/min points:
http://finance.yahoo.com/blogs/talking-numbers/222-years-interest-history-one-chart-173358843.html
It seems people are nitpicking over the meaning of a word (a sport I too enjoy), while ignoring what I think is a pretty shared understanding of the nature of rates over the past 35 years vs. other time periods.
Another word that people seem to have problems with is "cyclical". With that in mind, take another look at the graph, or sit back and enjoy Blood, Sweat, and Tears take on rates (Spinning Wheel):

@davidmoran
Typical of tunnel thinking, your preconceived concept of the meaning of "atypical" has led you to consider only one meaning of the term.
Webster's two primary definitions are (1) IRREGULAR, (2) UNUSUAL.
http://www.merriam-webster.com/dictionary/atypical
It was the second definition I had in mind while writing. I can't say whether the 1980-2015 period displayed on Kevin's linked CHART http://www.ritholtz.com/blog/wp-content/uploads/2010/08/1790-Present.gif is "irregular" compared to other periods, but it certainly appears "unusual" to me. We've fallen from around 18-20% on the 10-year to as low as 2%. No other period displayed comes close to that decline in magnitude.
DavidM - You are entitled to your own interpretation of word/words. However, that should not blind you to the broader message of the writer - nor lead you to attempt to cast another in the role of villege idiot as you seem prone to do. You know all too well that words often convey a wide range of meanings and it is context which further clarifies author's intent.
FYI: Some words synonymous with or related to "atypical" - from Thesaurus.com
abnormal
bizarre
deviant
different
flaky
odd
peculiar
strange
unusual
weird
aberrant
anomalistic
anomalous
curious
eccentric
exceptional
extraordinary
strange
uncommon
unexpected
unnatural
unorthodox
anomalous
devious
divergent
---
Added: DavidM - No need to attack Kevin. The burden of proof is on you to produce a contradictory chart. Generally, unless otherwise specified, I assume our discussions of stocks, bonds, interest rates, mutual funds, etc. post-date the Civil War Period (from around 1865 on). However, you can toss-out anything you want. Go clear back to the Dark Ages if you can find it!

FYI: Active fund managers are skilled and, on average, have used their skill to generate about $3.2 million per year. Large cross-sectional differences in skill persist for as long as ten years. Investors recognize this skill and reward it by investing more capital in funds managed by better managers. These funds earn higher aggregate fees, and a strong positive correlation exists between current compensation and future performance.
Regards,
Ted
http://blog.alphaarchitect.com/2015/06/19/surprise-some-active-managers-are-skilled/

FYI: The Federal Open Market Committee (FOMC) meeting has concluded and bond investors are still nervous about a possible rate hike coming later in 2015.
Regards,
Ted
http://investorplace.com/2015/06/worst-types-of-bond-funds-to-own-now/print