The Performance Persistence of Experienced Mutual Fund Managers
fund managers; relative percentile ranks; annual total returns; performance
This study examines the performance of 93 fund managers over the 10 year period 1986 through 1995 using relative percentile ranks based on quarterly compounded, annual total returns measured against funds with the same investment objective. On average, managers with 10-year track records at the same fund do not perform better than managers with shorter track records. Also, for these experienced managers, superior performance in one five-year period is not predictive of superior performance over the next five years. However, inferior performance persists, particularly for funds with above average expense ratios.