Morningstar advises investors to 'quit chasing' consistent fund performance

Funds 'fail to achieve top-quartile performance'

Investors should stop looking at consistent performance as a metric when selecting funds, according to research conducted by Morningstar.

The report, entitled Quit Chasing Unicorns: Consistent Fund Performance Is Overrated, found that over a ten-year period inconsistent funds were just as likely to finish top quartile as consistent performers. According to Morningstar data, of the 1,188 funds that finished in the top quartile of their peer group over the ten years to 30 November 2018, 702 failed to achieve top quartile performance for three years in a row. Furthermore, of the 486 funds that did manage to achieve top-quartile status over that period, 229 did so just once while only 73 were top quartile for three consecut...