http://allaboutalpha.com/blog/2007/03/20/focus-on-average-mutual-fund-is-a-straw-man-argument-fidelity-research-institute/ Hedge funds, portable alpha, 130/30 and alpha-centric investing Thu, 18 Mar 2010 13:53:53 +0000 http://wordpress.org/?v=abc hourly 1 http://allaboutalpha.com/blog/2007/03/20/focus-on-average-mutual-fund-is-a-straw-man-argument-fidelity-research-institute/comment-page-1/#comment-2671 Bill@mutualdecision Thu, 22 Mar 2007 12:37:17 +0000 http://allaboutalpha.com/blog/2007/03/20/focus-on-average-mutual-fund-is-a-straw-man-argument-fidelity-research-institute/#comment-2671 Having read the study, I agree with you that it's a very useful work. A statistically significant and positive alpha can lead to outperforming the market, particulalry when combined with a low expense ratio. Unfortunately, there are two problems with investors using this inofrmation. As you point out, marketing power has overtaken performance as the measure of success in the mutual fund industry. And, even if investors can find studies such as the above, they can't use it to generate a list of funds in which to invest. Having read the study, I agree with you that it’s a very useful work. A statistically significant and positive alpha can lead to outperforming the market, particulalry when combined with a low expense ratio. Unfortunately, there are two problems with investors using this inofrmation. As you point out, marketing power has overtaken performance as the measure of success in the mutual fund industry. And, even if investors can find studies such as the above, they can’t use it to generate a list of funds in which to invest.

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