Every now and again, investors can look at mutual fund performance charts and think they see an undiscovered gem, some issue that no one has heard about that appears to have a reasonable strategy, below-average expenses, and a place at the top of the charts.
More often than not, however, short-term performance leaders are no diamond in the rough - they’re cubic zirconium or fool’s gold.
That certainly appears to be the case with the Foresight Value Fund, the top mid-cap growth fund through the first half of the year, according to Morningstar Inc. It may be the poster child for why short-term performance should not be greeted with blind enthusiasm.
Typically, a fund with fabulous-but-volatile short-term performance will regress quickly to the mean, so that someone buying into the hot streak actually catches a coming cold spell.
Foresight Value is up more than 45 percent so far in 2009, or about four times the gain of its average midcap-growth category peer and nearly eight times better than the average stock fund, according to investment researcher Morningstar.
Foresight Value was started in 2004 by Michael Bissell, a chartered financial analyst who has a day job in engineering and runs the fund on the side. Bissell has yet to get a ticker symbol for the fund, noting that he hoped to have a decent five-year record before taking the steps - and paying the price - for getting a ticker.
Although many small funds do not go through the process of getting a ticker, investors should approach them with caution, because it may mean that the fund does not meet …
Read the original article at Philly
Related Posts
Tags: Business, buy, finance, financial, fund, Job, pay, stock
