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Younger Funds---And Managers---Are Better For Your Bottom Line
I have alway be partial towards younger funds, for the reasons outlined by that study. That is why I continously keep my eyes open. Forums like this are invaluable for this and many other reasons.
Dear mcmarasco: I have a general rule not to look at a fund until it is at least three years old. I like to see what kind of spurs the new fund manager has with your money. My motto is "Never Be The First One In", or the "Last One Out." Regards, Ted
After reading the Marketwatch post, I can only assume these guys recently returned from Colorado and brought some purchases along to maintain the mood. Recent MBAs with more modern techniques? GMAFB! When did you last invest with 3 new MBAs with a new paradigm? If I, and almost any investor who has crawled more than a few feet from the primordial shoreline, buy a new fund, it is managed by one or more people who were hired by an established mutual fund (who presumably sifted through the "best and brightest" of their applicants), who then (after several successful years) decided they had a better idea for investing (or a better means of getting most of the ER) and went out on their own (having been well reimbursed while they "learned the ropes"). By that time, they are several years from their business school instruction in the most recent methods in portfolio construction and management. If true, I am surprised that AUM has no impact. OTOH, statistically, 1 of 20 results can occur by chance at p = .05.
All I finally have to say is "Deja Moo" - google it.
Comments
I have alway be partial towards younger funds, for the reasons outlined by that study. That is why I continously keep my eyes open. Forums like this are invaluable for this and many other reasons.
Regards,
Ted
Do you make exceptions if the manager(s) have a proven superior track record?
If I, and almost any investor who has crawled more than a few feet from the primordial shoreline, buy a new fund, it is managed by one or more people who were hired by an established mutual fund (who presumably sifted through the "best and brightest" of their applicants), who then (after several successful years) decided they had a better idea for investing (or a better means of getting most of the ER) and went out on their own (having been well reimbursed while they "learned the ropes").
By that time, they are several years from their business school instruction in the most recent methods in portfolio construction and management.
If true, I am surprised that AUM has no impact. OTOH, statistically, 1 of 20 results can occur by chance at p = .05.
All I finally have to say is "Deja Moo" - google it.