FYI: A guard, in suit and tie, asks me to pop the trunk of my rent car. Then I can enter the underground parking lot of a tall building in downtown LA. Upstairs, another guard confirms my appointment. Soon I am admitted to the elevator banks that will take me to the 53rd floor. This is the headquarters of Capital Research and Management. It is the third largest fund complex, with $1.25 trillion under management. But most people know it as the American Funds group.
I’ve come to speak with two researchers from the firm, Thomas Lloyd and Stephen Deschenes. They directed two fascinating research studies. The first demonstrates that the equity-focused funds managed by Capital Research have beaten their target index most of the time. For decades.
Regards,
Ted
http://assetbuilder.com/scott_burns/beating_the_indexExpect More From The Core:
https://www.americanfunds.com/individual/insights/investment-insights/expect-more-active-core.html
Comments
Anybody else have an opinion of them? It's not only the data on the American Funds that I find difficult to believe. Even the data on the non-American Funds is hard to believe:
"How did other active managers do? They beat their index 51 percent of the time over 10-year periods. They beat it 42 percent over 20-year periods. And they beat it only 38 percent of the time over 30-year periods."
Prior to this, I've not seen it reported that 38 percent of funds beat their index over a 30-year period.
The data for the American Funds seems very difficult to believe:
"They measured the performance of their equity-focused funds in different time periods. The time periods ranged from 1934 through 2012. They found that the American funds beat their index bogies 73 percent of the time over 10-year periods. The odds improved to 83 percent of the time over 20-year periods. And to 98 percent of the time over 30-year periods."
http://www.marketwatch.com/story/one-way-to-try-to-beat-the-sp-in-2016-2015-12-31
It would be to track going forward, and/or back-test, with a dummy portfolio.