Having said that, discretion is always required when selecting funds at the top of any list. For example, in Figure 4 in the large-cap blend category, CGM Focus is ranked first. It has had high returns in recent years, but with a high degree of volatility (as measured by five-year standard deviation of return). Conversely, Oakmark Equity & Income has generated one-, three- and five- year returns in excess of the large cap blend averages (shown in Figure 1) but with nearly 80% less volatility.
A key element in Figures 4 through 6 is that all of the funds (at the time of the analysis) were available to investors without purchase constraints (e.g. closed to new or all investors, institutional and/or qualified access). Moreover, each of the funds has a relatively low investment threshold ($25,000 or less). In most cases, the initial investment requirement is far less than $25,000, with common figures in the range of $1,000 to $5,000. Therefore, the U.S. equity funds in Figures 4-6 represent the "best of class" that are accessible to investors at large.
Those interested in supplemental information on the charts may contact the author at [email protected].
Craig L. Israelsen, Ph.D., teaches family finance at Brigham Young University.