Experienced Managers Outperform Benchmarks

May 4, 2001 (PLANSPONSOR.com) - Mutual funds run by experienced managers performed better than the average domestic equity fund in the past year's volatile market, results from a recent Morningstar survey show.

Funds with at least $100 million in assets were surveyed, with performance figures taken from the year ending March 31, 2001. The major indices lost large amounts of their value during the period.

Results show that funds run by managers or management teams with at least four years tenure outperformed both the S&P 500 and the average domestic equity portfolio. The S&P 500 fell 22% during the period.

The study found that the more experienced the group of managers, the smaller their losses were compared to the benchmarks.

The funds managed by stock pickers with below average tenure also outperformed the S&P 500, but did not perform as well as the typical US stock fund or those run by more experienced managers.

Other results show:

  • just over half of the domestic stock funds meeting the net asset and manager tenure criteria ended the period in the upper half of their categories
  • more than a third of the funds that beat their peers were value portfolios, while 27% were growth funds.