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

[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-...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/...ocation3_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]

Quote:

Originally Posted by pb4uski 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-...ight-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]

Quote:

Originally Posted by Scrapr 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/quote...n=MUTF%3AVTSAX

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

[garyt]

Quote:

Originally Posted by USGrant1962 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.

Agree completely. The "why would they not invest on their own and buy an island/" is silly for many reasons.

[SecondCor521]

Quote:

Originally Posted by Koolau Did I miss something or didn't OP name the fund in post 27?

I've been reading this thread regularly, and I usually read all posts carefully. I'm fairly confident post #27 didn't have the name of the fund in it when the subsequent posts pointing out that it hadn't been named yet were written.

In other words, timeline is something like:

OP writes post #27 and it doesn't have the name of the fund in it.
Several other posters post #28 and following pointing out that the fund hasn't been named
OP edits post #27 to list the name of the fund.

It's either that, we're all careless thread readers (including me, and I'm usually not careless), or there was a glitch in the matrix. My vote is on an OP edit.

[Time2]

I haven't seen where anyone mentions the drop from 52 to 8 around the year 2000, it didn't do quite so bad in 2008 it only dropped 54%. It only did real well in the last 18 months starting at the low of the Covid drop.

[UnrealizedPotential]

Quote:

Originally Posted by Time2 I haven't seen where anyone mentions the drop from 52 to 8 around the year 2000, it didn't do quite so bad in 2008 it only dropped 54%. It only did real well in the last 18 months starting at the low of the Covid drop.

I was going to mention those ugly years, but I saw little reason to. I suspected OP knew the down years wouldn't live up to close examination and that is why OP was very reluctant to name the fund.

[SecondCor521]

Quote:

Originally Posted by Time2 I haven't seen where anyone mentions the drop from 52 to 8 around the year 2000, it didn't do quite so bad in 2008 it only dropped 54%. It only did real well in the last 18 months starting at the low of the Covid drop.

That falls under the "90% of the time" exception.

[REWahoo]

Quote:

Originally Posted by GTFan Exactly. OP either name the fund or stop posting in this thread because it's pointless to continue otherwise.

He did name it. See post #26.

[Sojourner]

Quote:

Originally Posted by UnrealizedPotential I was going to mention those ugly years, but I saw little reason to. I suspected OP knew the down years wouldn't live up to close examination and that is why OP was very reluctant to name the fund.

Yeah, the M* chart from post #42 completely undermines OP's claims from post #1. Completely. So much so that I don't see how OP could've made those claims with anything resembling sincerity.

OP, if you're still here and you really, honestly believed what you said about this fund, please explain how you can square the fact that it has ranked at or near the bottom quartile vs. its peers for 5 out of the past 11 years with your statements quoted below:

Quote:

Originally Posted by Digital Nomad Over 90% of the time it beats the competition year after year. This Fund just does better than its peers year after year after year after year!

[SecondCor521]

Quote:

Originally Posted by REWahoo He did name it. See post #26.

This thread is changing underneath us. See my commentary in (currently) post #52:

https://www.early-retirement.org/for...ml#post2678161

Where the post you're referencing was post #27 then. Since it's #26 now, my guess is that a post above it got deleted. Probably a post by the OP, but I'm not keeping track close enough, and honestly don't really care.

[REWahoo]

I've reached "Not my monkey, not my circus" status on this thread.

Carry on...

[RunningBum]

I wonder if at the start of 2018 or 2020, before those killer years, if CPODX was a screaming BUY.

Peter Lynch at Magellan is the best example of an expert mutual fund manager who consistently beat the market. He managed Magellan from 1977-90, though the fund didn't open to the public until 1981. I can't easily find his yearly records, but this Wiki page starts at 1984:
https://en.wikipedia.org/wiki/Fidelity_Magellan_Fund
I don't know when he stepped down in 1990 so I won't count that loss against him, but he only beat the market 4 out of 6 years 1994-1999.

https://www.globalbrandsmatter.com/b...magellan-was-1 has this chart:




Clearly the fund did much better than the S&P overall, but there were some significant drops, worse than the S&P, in 1981, 1984, 1987 and 1989. It would appear he took risks. Many paid off, but some did not.

Certainly no one was going to jump in the fund in 1977 (even if they could) and expect such superior performance. They would see after a few years that it did well. So let's see what happens if you bought the fund after a great run, compared to the S&P 500. I'll guess that big drop in 1981 had something to do with opening the fund to the public, so I won't start just before that. But how about early 1983, after a great run in 1982:

You could have bought the fund for ~$400, and at the end of the chart it's at $604.66. About 50% higher. Or you could have bought an S&P 500 index at around $75? Hard to tell, but definitely under $100. And at the end of the chart it's at $233.79. More than doubled, probably even tripled. Hmmm. It looks like a fast start while the fund was private juiced his overall return, but it's not that great once the public got could get in. Really good returns, because the market did well in the 80s, but he wasn't actually beating the market after establishing his track record. Am I reading that chart wrong?