Do you have what it takes to stay the investment course?
Many mutual funds do not. Over the last fifteen years more than 58% of domestic equity funds were either merged, or liquidated, almost 52% of global/international stock funds disappeared and 49% of fixed income funds did not survive as distinct identities.
Long term survival is especially difficult for the fund managers themselves. The Wall Street Journal’s “The Intelligent Investor” columnist and WEALTHTRACK guest, Jason Zweig analyzed the situation recently using numbers from Morningstar.
Gates Capital Management's ECF Value Funds have a fantastic track record. The funds (full-name Excess Cash Flow Value Funds), which invest in an event-driven equity and credit strategy, have produced a 12.6% annualised return over the past 26 years. The funds added 7.7% overall in the second half of 2022, outperforming the 3.4% return for Read More
“Of the 525 U.S. stock mutual funds that existed 30 years ago, 223 still are operating today…” That is a 42% survival rate- but here’s the clincher:
“…only six are still run by the same manager.” In his analysis of the survivors Zweig identified two key intertwined qualities: stamina and patience. As he wrote, “stamina is the key to success and patience is the key to stamina.”
One of those six marathon mutual fund managers is this week’s WEALTHTRACK guest. He is John Rogers, Founder, Chairman, CEO and CIO of Ariel Investments, the firm he started in 1983 at the tender age of 24.
From the very beginning, on the masthead of his “Patient Investor” newsletter, Rogers has used the Aesop’s fables “Slow and steady wins the race” expression along with the tortoise as the symbol of Ariel’s investment approach.
In 1986 he launched the value-oriented Ariel Fund which he manages to this day, now with the help of two colleagues. The fund celebrated its 30th anniversary in November of last year and has delivered 11.5% plus annualized returns since the beginning, beating the S&P 500 by a percentage point a year, matching its mid-small cap value benchmark and placing it in the top 10% of all equity funds.
What’s the formula for this investment longevity and success? I asked Rogers to share his market beating approach.
In my EXTRA interview with Rogers, available exclusively on our website, he will explain why he’s never used a computer, doesn’t use email and insists upon doing his research the old fashioned way. If you’d like to watch the show before the weekend it’s available to our PREMIUM viewers right now. You can also find the One Investment picks of our guests and my Action Points there.
Also, if you're looking to take WEALTHTRACK with you on your commute or travels, you can now find the WEALTHTRACK podcast on TuneIn, Stitcher, and SoundCloud, as well as iTunes. Find out more on the WEALTHTRACK Podcast page.
Thank you so much for watching. Have a happy Father’s Day, a great weekend and make the week ahead a profitable and a productive one.