AI & Asset Allocation, Appendix 1

History is opaque. You see what comes out, not the script that produces events.
-- Nassim Taleb, "The Black Swan" 2008

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< Part 1  |  Part 2  |  Part 3  |  Appendix 1  |  Appendix 2  >

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A Selection of Actively Managed Funds

Image: Belfius, Scales
(2012, shared per license)

Mr. Rock Brockman, ChFC, CLU, principal of WHB Financial Advisors of Rockville, Maryland, on reading Parts 1 and 2, wrote to me identifying seven mutual funds, with their performance measures, that outperformed the S&P500 over the last 40 years. These are “actively managed” funds, in which the manager chooses investments according to some method that depends on her own principles of good investments. They aren't “passively managed” funds based on an index the manager seeks to match. (Those funds we have discussed in Parts 1, 2 and 3 of this article are “passively managed” funds, for which the method can be duplicated.)

This table shows seven funds that have, from 1976 to 2019, increased in value more than the S&P500. The table shows the cumulative growth of a $10,000 investment, assuming reinvestment of dividends. Mr. Rock Brockman provided these figures from sources he believes to be accurate. (VFINX, a S&P500 index fund, is shown for comparison).

Fidelity Magellan	FMAGX	$3,910,000
American Funds Growth Fund	AGTHX	$2,610,000
T. Rowe Price New Horizons	PRNHX	$2,390,000
Fidelity Contrafund	FCNTX	$1,960,000
American Funds	AMCPX	$1,950,000
Dodge & Cox Stock	DODGX	$1,620,000
Davis NY Venture	NYVTX	$1,040,000
Vanguard 500 Index Investor	VFINX	$822,541

No one can assure that these funds will perform similarly in the future.

< Part 1  |  Part 2  |  Part 3  |  Appendix 1  |  Appendix 2  >

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Images

See Part 1.

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Image: Daniel Brockman, Public Domain