Mutual Fund Winners Don’t Stay Ahead for Long

Mark

NY Times article:

"A new study finds that hot mutual funds generally don’t keep outperforming from year to year, overturning an important finding from the 1990s."

Mutual Fund Winners Don't Last

msf

Here's the NYTimes link:
https://www.nytimes.com/2020/07/31/business/mutual-fund-winners-stocks-bonds.html

I ran across this study a couple of months ago. You can find a list of Prof. Choi's papers (including links to free versions) here:
https://faculty.som.yale.edu/jameschoi/research/

The referenced paper goes by a different title in that list. There it is called Carhart (1997) Mutual Fund Performance Persistence Disappears Out of Sample

If you want to read a version (virtually the same) with the title mentioned in the NYTimes article, here's another link. This version is not easily downloadable.
http://docplayer.net/141854703-Did-mutual-fund-return-persistence-persist-a-replication-and-extension-of-carhart-1997.html

davidrmoran

Interesting that over the last 7y MTUM has also outperformed (a little) VOOG (tho not VONG), also CAPE, also all of the hot div ETFs.

All shorter periods however show victory goes to VOOG, though again VONG hammers everyone including it ---

that is, everyone except TRBCX, which beats even VONG except on occasion. So that last TRP worthy is the exception that proves the whatever the fool phrase is.

racqueteer

Might want to take a look at OGIG.

Mark

@msf - thank you for the back up

Rbrt

For those that wonder, OGIG is O’Shares Global Internet Giants (great name). And lately it has killed:
https://www.etf.com/etfanalytics/etf-comparison/OGIG-vs-SPY

FD1000

The purpose of MTUM is to use "Exposure to large- and mid-cap U.S. stocks exhibiting relatively higher price momentum" and not value or growth and why it needs to compare to SPY(blend index) + MC.
MTUM easily beat SPY for 1-3-5 and since inception.

For growth QQQ easily beat VOOG,VONG for 1-3-5-10 years and it also beat TRBCX for 1-3-5-10 years.

davidrmoran

well, of course