I found a Growth Mutual Fund that has beat its peers for 90% of the last 20 years- Wh

[Digital Nomad]

OK, OK, here is the Mutual Fund I am talking about:

CPODX (Morgan Stanley Insight I)

Here is some more information for your reading pleasure:

https://www.investors.com/etfs-and-...utual-funds-awards-2021-best-large-cap-funds/

 

[lesjrp]

Yep, we all share that kind of information here. And if I found a fund I liked I would share the sticker symbol so people could pick it apart, because that’s what I would want. Critique on something I am missing with that fund perhaps and Believe it or not it has happened before. As a matter of fact, many of the articles recommending mutual funds when actually compared to their benchmark are obviously not worth it or there is a better mutual fund easily found. Or, I guess I could just be a tease or worse.

 

[jollystomper]

Yep, we all share that kind of information here. And if I found a fund I liked I would share the sticker symbol so people could pick it apart, because that’s what I would want. Critique on something I am missing with that fund perhaps and Believe it or not it has happened before.

+1

OP, beware of becoming a legend in your own mind. I would much rather have folks who I assume are more knowledgeable than me pick apart my research, than think I know better than them. The analogy is why many of us came to this forum to have others pick apart our finances when we asked "can I retire?" - no one can know everything, and it is always best to get multiple perspectives.

 

[pb4uski]

I think the OP was concerned that if he shared the ticker that we would all jump on his stellar research and bid up the price of this mythical outstanding large growth fund.

 

[USGrant1962]

Another way to look at this is to hypothesize that a person with such talent exists and ask why he or she would make their skills available to retail investors for a pittance. French discusses this in that video I linked. I think the answer is not. IF such a person or people exist, they are lying by the pool on their megayachts or on the beachs of their private islands. Why would they keep working for others? Answer IMO is that they wouldn't. Why would they?

While I agree that outperformance is likely random, this is one of the most common yet least persuasive arguments.

How would said person know they had such talent and keep it to themselves? IRL, they would get their Ivy MBA and start with VG/Fido/Black Rock or a hedge fund as a junior for a decade. Then if they were really good they would get to manage a large mutual fund. It would take another 10 years for them to "prove" outperformance. Then at 45ish they get to decide do I play with OPM and make $XM/year salary/bonus or strike out on my own with whatever capital I have accumulated. Some would do the latter, but many would "diversify" by taking the megacorp OPM income and investing their own capital in parallel. Honestly, outperforming the market by one or two percent (which is what we are talking about when we say "beat peers") isn't some secret sauce that will make an individual wealthy in just a few years.

The ones that make bank in hedge funds in their 20s/30s are "aggros" as we say in poker. But that is a high variance game and it is not obvious it is best for any individual player due to the variance. Likely that more bust out than win.

 

[RobbieB]

No name, no comment.

 

[Montecfo]

and the suckers that did all the research & invested only to find out PP /= FP. And they lost their shirt. Magellen fund was a top performer. The last 5 years it hasn't beat the Vanguard Total Market

Sure. But you make a mistake assuming a fund must beat its benchmark for each five year period don't you think? It's a relatively short time in the market.

 

[lesjrp]

I think the OP was concerned that if he shared the ticker that we would all jump on his stellar research and bid up the price of this mythical outstanding large growth fund.

Wouldn’t that be a good thing?

 

[pb4uski]

He said that he hasn't bought it yet. Besides, I was being sarcastic.

 

[REWahoo]

Only one way to determine if the OP has actually found a consistent winner and that is for him to purchase the fund, then identify it for us (eliminates the possibility we will run up the price ). He can then return here in 20 years and show what a mistake we made by not buying it.

 

[Sunset]

It can't be Renaissance Technologies’ famed Medallion fund, available only to current and former partners, as regular folks can't buy in.

 

[easysurfer]

This post has me thinking, "Haven't heard from Boho in awhile".

 

[Koolau]

Did I miss something or didn't OP name the fund in post 27? Maybe time to take a look and not dump on OP (at least until evaluating the fund for yourself.)

I'm not knowledgeable enough to comment on the info found in the post, but it seems like the fund has done well - for its short history. I'm not buying it as I have my AA set up the way I want it.

Good luck to OP - whatever you decide. Maybe check back here if we haven't driven you off!

 

[donheff]

Did I miss something or didn't OP name the fund in post 27? Maybe time to take a look and not dump on OP (at least until evaluating the fund for yourself.)

I'm not knowledgeable enough to comment on the info found in the post, but it seems like the fund has done well - for its short history. I'm not buying it as I have my AA set up the way I want it.

Good luck to OP - whatever you decide. Maybe check back here if we haven't driven you off!

+1 I was about to post something about how much fun it is to watch a new troll pester everybody and then Koolau pointed out how easy it is to skip by key posts when you are skimming So, CPODX it is.

 

[VanWinkle]

80% of Five star managed funds rated by Morningstar for the past 5 years end up in the bottom 25% of funds in the next five years. Managers get return above the market, until they don't. Don't think you can drink the Kool-ade without getting a little of the poison too. There are no secrets in the market that aren't already known be someone.

 

[pb4uski]

Yes Koolau, you are correct. While I'm not sure what tickers are included in his peer group, I selected a couple growth funds from Kiplinger 25 and ran them through Portfolio Visualizer for twenty years plus YTD... Jan 2020 to Sept 2021. https://www.kiplinger.com/kiplinger-tools/investing/t041-s000-kiplingers-25-favorite-fund/index.php

Portfolio	Initial Balance	Final Balance	CAGR	Stdev	Best Year	Worst Year	Max. Drawdown	Sharpe Ratio	Sortino Ratio	US Mkt Correlation
Morgan Stanley Insight I	$10,000	$55,738	8.22%	25.52%	116.57%	-48.52%	-81.85%	0.38	0.55	0.81
Mairs&Power Growth Inv	$10,000	$89,846	10.62%	14.33%	35.64%	-28.51%	-45.78%	0.67	1.02	0.88
Fidelity Blue Chip Growth	$10,000	$65,417	9.02%	17.30%	62.23%	-38.60%	-55.34%	0.50	0.75	0.95

https://www.portfoliovisualizer.com...cation2_2=100&symbol3=FBGRX&allocation3_3=100

CPODX underperformed the other two funds and had a higher standard deviation than the other two funds, lower Sharpe and Sortino ratios and lower US market correlation... so it looks to me like it is more volatile but doesn't provide better returns.

 

[mrfeh]

Table below from M*. The OP's assertions in post #1 are clearly incorrect.

 

[pb4uski]

It looks like each year it is either outstanding or dismal, but agree... doesn't consistently outperform.

 

[mrfeh]

It looks like each year it is either outstanding or dismal, but agree... doesn't consistently outperform.

Right. The graph looks impressive because there were a couple years where the manager hit it big.

Similar to results you might see at a roulette wheel.

 

[VanWinkle]

I'm sure that everyone in the fund remained invested when it dropped over 80%........ The actual investors in this fund likely did not beat the overall market due to buying high and selling low.

 

[RunningBum]

https://www.morganstanley.com/im/en...ance/mutual-funds/us-equity/insight-fund.html

CPODX had a huge year last year. Much higher return that its benchmarks. I suspect they did a great job of timing the drop and recovery last spring. It also had a high return in 2017 and a relative high in 2018. That skews any X year look back from the end of 2020.

As of 9/30/2021 the one year and YTD return is trailing its benchmarks (Lipper and Morningstar category averages and Russell 3000). ~20% return compared to ~27%. In 2014 and 2016 it fell short too.

0.84% expense ratio. $5,000,000 minimum, so gosh darnit, I'm going to miss out on this one.

 

[Markola]

Regardless, “Past results are no guarantee of future performance.”

 

[GravitySucks]

To get back to his original question:

I would have loved to jump into Magellion when Peter Lynch began managing it. He beat the market over the next 13 years. It wasn't preordained though and there was no guarantee year 14 would be like the last 13. (It was not, and I'm pretty sure the new manager was following the same methods at least during his first year.)

I remember Lynch writing when he left that the fund had gotten so large the methods he used no longer applied. If Mr. Lynch called and said he'd like me to invest in a fund he was starting I'd probably decline.

 

[OldShooter]

I looked up CPODX and found this on the AAII site " This fund tracks the Russell 3000 Growth TR USD index, with a weighting of 100%." Later information, however, makes it clear that the fund is a stock-picker. Looking at performance, the fund tracked the Russell 3000 almost exactly until 2018. Beginning in 2018 it looks like they ditched the index idea and started picking stocks. It began to diverge favorably and in about 2020 it took off. Obviously the fund started buying tech. Morgan Stanley's site says they are 55% IT and communications. Biggest holding is Shopify, which has been recently hot, second is "Snowflake Inc." which is some kind of cloud company, each about 6% of the portfolio.

Morgan Stanley's target market for CPODX is apparently people who don't understand fees and who have been given control of far too much money.

So, dear OP, the answer to your question is that this is a stock-picker who recently got lucky. When the current tech bubble subsides, CPODX will certainly subside with it. Go back in history and read about stocks like Worldcomm and Cisco to see what is probably in store.

 

[garyt]

and the suckers that did all the research & invested only to find out PP /= FP. And they lost their shirt. Magellen fund was a top performer. The last 5 years it hasn't beat the Vanguard Total Market


https://www.google.com/finance/quot...Q3ecFegQIBRAb&window=5Y&comparison=MUTF:VTSAX

In fairness, Magellan was a top performer because of Peter Lynch who left it eons ago.