Do Recent Winning Mutual Funds Maintain Their Outperformance?!
(2 min read)
Countless disclaimers tell us that “past performance is no guide to future performance”, but in mutual funds, many investors think it is. And not only do they use past performance as a guide, their actions are backed by several seminal academic studies from the 1990s – notably M. Carhart’s 1997 paper “On Persistence in Mutual Fund Performance”. However, Yale University academics J. Choi and K. Zhao recently updated Carhart’s work in their new paper “Did Mutual Fund Return Persistence Persist?” Their answer is no.
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