On their blog they summarize their findings....
Our new paper, Luck versus Skill in the Cross Section of Mutual Fund Alpha Estimates, takes another look at the performance of mutual funds. Bootstrap simulations produce no evidence that any managers have enough skill to cover the costs they impose on investors. If there are managers with sufficient skill to cover costs, they are hidden among the mass of managers with insufficient skill.Yet more evidence against buying funds with active management fees. If you are investing for the long run you can basically control two things. Diversification and fees. So buy well diversified index funds.
That's an interesting topic to discuss upon. I completely agree with Kenneth R. French and Eugene F. Fama in regards to what they have discussed in the article about Mutual Fund investment.
ReplyDeleteIt's true that no one can assure to cover up the cost of investments in today’s finance market even if he is an experience and skilled person. Considering the skills one's advice can be considered, but it will not be a smart decision to rely on it.
Thanks for the comment - and nice blog! I posted a link to it.
ReplyDeleteCheers