Hard to Keep Up Performance

“The low count of mutual funds that consistently maintain top quartile rankings is a sobering reminder about the risks of chasing past performance,” said Srikant Dash, Index Strategist at Standard & Poor’s, in a statement.

S&P also looked at longer time horizons, and found that only 17.5% of large-cap funds with a top quartile ranking over five years ending June 30, 2001, maintained a top quartile ranking over the next five years ending June 30, 2006. Only 6.8% of mid-cap funds and 18.7% of small-cap funds repeated their top quartile performance over the same period. Similarly, 36.3% of large cap funds, 26.4% of mid cap funds and 47.0% of small cap funds with a top half ranking over five years ending June 30, 2001, maintained a top half ranking over the next five years ending June 30, 2006, S&P found.