Standard & Poor's has released its latest mutual fund scorecard, measuring the consistency of top mutual fund performers over three and five consecutive years. It also measures performance and persistence.
As of Dec. 31, 2005 the scorecard shows that 15.5% of large-cap funds, 10.2% of mid-cap funds and 9.8% of small-cap funds remained in the top-quartile ranking for a period of three consecutive years. Also, 32.2% of large-cap, 27.3% of mid-cap and 25.7% of small-cap funds consistently maintained a top half ranking.
"Very few funds managed to maintain a consistent top-quartile ranking for long periods of time," said Srikant Dash, index strategist at S&P. "Our study shows that over five consecutive years, only1.9% of large-cap funds, 3.1% of small-cap funds, and no mid-cap funds have managed to minimize or avoid losses during the bear market relative to their peers."
"When we viewed consecutive 12-month performance or non-overlapping cumulative periods, consistent top performers all had experienced management teams with tenure higher than their peers," said Rosanne Pane, a mutual fund strategist at S&P. "Experienced management teams can successfully maneuver their funds through a variety of market environments."