Luck or Skill?

Good article about a well performing mutual fund.  Number 1 Ranked Mutual Fund Bests S&P 500 for 40 Years.

Why is it a good article?  It makes an important note about mutual fund “flows” or, money deposited to or withdrawn from mutual funds on a macro scale.  It says, Last year, actively managed mutual funds that buy U.S. stocks suffered a net $98 billion in redemptions, while domestic stock index funds and ETFs attracted a net $167 billion. ETFs, nearly all of which mimic indexes, received $95 billion of the total.   The two biggest recipients of mutual fund cash last year were Vanguard Group, the index fund leader, and Dimensional Fund Advisors…”  I have written about the S&P 500 and other indices before.  One post called, An Index by Any Other Name, goes into a lot of detail and also has links to other posts I have done on the subject of passive management and Dimensional Fund Advisors.  Another post about Dimensional, Life Long Learning, discusses why we use them. 

Lots of good reading!

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