June 10, 2003

The Best Mutual Funds: Is That All There Is?
by Marcel Chartier

Ultimately, at the end of an asessment of investment options, you should be saying - is that all there is? Why? Because there should be just a few strong options left standing. You are looking for the strongest contenders for your investment dollar.

Go to a mutual fund research site, do a search for the best funds over the past 10 or 15 years, you may see a few names over and over. That is what you are looking for. Look at the names, evaluate what you see against the markets, sift out those that are successful as a result of unusual market conditions (like our 3 year bear market) and seriously look at the rest. Thats it. That's all there is. Those are your winners. Check them over to ensure the same fund manager is there now as when the success was made, evaluate if the fund has veered or stayed on its path, talk to your financial advisor, and if things are problem free, you have good contenders for your portfolio.

For example, I just went to globefund.com and did a filter for the best returning funds. My screen was for funds returning over 12% for the past 10 and 15 years. I am ignoring data for the past 5 years as the long bear market will have skewed results in favor of sector funds such as precious metals or oil. What I found were 7 funds. Three of those funds were "affordable" funds for the average investor. What I mean by affordable is that they did not have the $25,000 to $150,000 minimum amounts the other funds required. True their MERs are higher, but so are their returns.

You can continue this process with smaller returns to broaden your choices, but in the end there are only a few funds with long term stellar returns. Isn't that all you need?