Thanks for spending the time doing all this research, which has been amazingly eye-opening. I am wondering, however, if any thought was given to how to deal with funds which changed mandate after opening? I'm thinking specifically of PRBLX, which was a balanced fund until 1998 and VDIGX, which was a utilities fund until 2003. Both went on to far greater success with their new strategies, but I assume there are plenty of others who fell on hard times after a switch.
Comments
OK, sad to say, that in Introducing MFO Rating System, one of the qualifiers was:
"The system does not account for category drift."
So, Mr Darcey is absolutely right. Our system may offer no help here. That one, I'm afraid to say, is left to the investor.
I actually think M* does pretty good job here, but only back 10 years, to my knowledge:
I first thought about this when comparing PRBLX and VDIGX. As soon as i asked, I realized it would be impossible to do the basic research as well as moniter changes for every fund on the market. M* charts do show dates of mandate change for a fund sometime (VDIGX has a dotted line on the date of the change). But so does your work if one pays attention. Dividend Growth goes from a 2 return rating to a string of 5s at the 10 year mark, right at the point of drift.
Anyway, since people haven't said it enough, thanks again for the great work and enjoy the vacation.