Why Good Funds Turn Bad

Past results are no guarantee of future performance, they say. Here are some reasons why.

(Image credit: temmuz can arsiray)

Finding great actively managed funds is a snap. Anyone with access to a computer can screen for funds that have outpaced a particular market or benchmark over just about any time period. But picking funds that will excel in the future is another story. As advocates of indexing are quick to note, few of those past winners will shine in the years to come. Some will lag their bogeys by a bit; many will metamorphose into mediocrity; and a few will turn into flat-out disasters.

(Image credit: iStockphoto)

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Nellie S. Huang
Senior Associate Editor, Kiplinger's Personal Finance

Nellie joined Kiplinger in August 2011 after a seven-year stint in Hong Kong. There, she worked for the Wall Street Journal Asia, where as lifestyle editor, she launched and edited Scene Asia, an online guide to food, wine, entertainment and the arts in Asia. Prior to that, she was an editor at Weekend Journal, the Friday lifestyle section of the Wall Street Journal Asia. Kiplinger isn't Nellie's first foray into personal finance: She has also worked at SmartMoney (rising from fact-checker to senior writer), and she was a senior editor at Money.