The sobering stats behind 'past performance is no guarantee of future results' 📊
Winning fund managers rarely keep winning 📉
It’s incredibly difficult to construct a portfolio of stocks in a way that beats the competition.
Even if you are able to generate industry leading returns in a given year, history says it’s an almost insurmountable task to stay on top consistently in subsequent years.
On Wednesday, S&P Dow Jones Indices published their latest Persistence Scorecard, which tracks the performance of equity funds over time. The data confirmed that most top-performing fund managers rarely stay on top.
“Our report for year-end 2022 finds little evidence of persistent active management success, despite considering a variety of metrics and lookback periods,“ SPDJI’s Craig Lazzara and Davide Di Gioia wrote.
The researchers reviewed the performance of actively managed equity funds across categories over 10 years through 2022. Of the funds that were in the top half of performance in the first five years, less than half were able to remain on top during the subsequent five years in every category. (See the chart above.)
Keep reading with a 7-day free trial
Subscribe to 📈 TKer by Sam Ro to keep reading this post and get 7 days of free access to the full post archives.