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Fund Spy

6 Medalists Posting Extreme Performance in 2017

How to make sense of short-term performance when you are a long-term investor.

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How should you look at extreme performance in a fund? There’s a natural emotional response to want to invest more in your winners and dump the losers, but that’s not really a good idea. To illustrate the point, I pulled three of the best- and worst-performing Morningstar Medalists based on year-to-date performance.

Funds are best viewed from a great distance. My preferred time period is over the entire tenure of the lead manager. Failing that, 10- or 15-year time periods are ideal provided the management team and strategy have largely remained intact over that stretch. It takes time for skill to show up in fund records, so don’t look for it in year-to-date returns, which are largely noise.

Russel Kinnel does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.