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From Heroes to Zeroes


“Past performance is no guarantee of future results.” If you’ve ever doubted that statement, just look at the picture.

You may already be familiar with the study done by the S&P Dow Jones Indices team, where they looked at the performance of the top 25% of U.S. stock mutual funds that had been around for at least 12 months as of March 2010.

They tracked these 2,862 funds for the following four 12-month periods through March 2014, and found that only 2 of them actually managed to achieve top quartile performance for those 5 successive years!

Update: By March 2015, even those two managers were unable to maintain their top performance!

Still, many investors think they can beat the odds and fi an investment manager who can maintain a strong track record over time. But really, chances are good that if you fi a man- ager touting “great” results, those results will not be so impressive in the future.

This why we believe that instead of struggling to beat the markets you should focus on capturing market returns. Backed by science and research, not guesswork, this approach aims to off the highest probability of achieving investors’ long-term plans.

Just remember it this way: 2,862 + 6 years = 0.