The returns of over 2,000 mutual funds were compared for 10 years in a study conducted by Morningstar. The study reveals the new funds on average outperformed their peers within their categories in the first 12 months of their inception.

Some reasons mentioned in the article: fund managers have more flexibility in buy stocks, fund companies put extra attention on the new funds to make them successful, and fund companies tend to launch new funds when their investment categories are hot.

Instead of jumping into and out of the hot new funds each year, I still think sticking with a few low-cost index funds is a better long term strategy.

 

Submitted: Jun 17, 2008    Views: 86    Comments: 0    Likes: 1   


View Article: http://www.kiplinger.com/columns/value/archive/2008/va0616.htm


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