Mutual fund managers typically fail over the long term when they try to mimic the investment strategies of rivals at better-performing funds, a study of U.S. mutual funds has found.
"Copycat" mutual funds seek to identify those actively managed funds that post the best returns and the highest inflows of assets. It's a less-expensive approach than investing in research to find, say, under-valued assets that can boost investors' returns.
The research suggests copycatting is a boondoggle. "We find little evidence to suggest that managers are able to detect superior funds," write the researchers.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
