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Study Shows Simple Way to Find Funds Likely to Outperform

Mark Hulbert, editor of The Hulbert Financial Digest, reports on a very interesting, new mutual funds selection study by three finance professors in a New York Times article published here in the International Herald Tribune. Hulbert said the professors' "idea is to compare each fund's returns with how it would have performed had it simply held, without trading, the stocks it listed in its most recent public disclosure." This simple approach avoids "benchmark confusion," and shows that "on average, funds with consistently positive return gaps were much better bets for future performance than those that were consistently negative..."