See if any fund manager can outperform the market, and the fund manager who outperforms the market is also a good fund manager.

The following statistics show the relationship between the three-year return rate of each fund manager and the next three-year return rate. Where 1-4 means that the annualized income exceeds the Shanghai and Shenzhen 300 Index 15%, 5%- 15% and 0-5% respectively, and is lower than the index.

It can be seen that the yield of fund managers exceeding the Shanghai and Shenzhen 300 in the past three years is not necessarily related to the next three years. It can even be said that fund managers who have outperformed the market in the past three years have a high probability of underperforming the market in the next three years. In other words, there is no necessary relationship between outperforming the broader market.

Then, will fund managers who often outperform the broader market have a big winning rate in the future? The conclusion is still not big. Fund managers who have outperformed the market five times in the past five years have a high probability of being equal to or lower than the market in the next three years.

3. Absolute income

What if I pursue absolute returns? I just want to see if the fund manager can bring me stable income. Can fund managers whose annualized rate exceeds 15% bring better returns in the future?

Here we find an interesting phenomenon, that is, after the rate of return in the past 1 year reached 15%, there will be two levels of differentiation in the following year, while the rate of return in the past three or four years reached 15%, but there was an obvious reversal?

What does this mean? Do fund managers really have the ability to create income in the short term?

No, my understanding is that it embodies the concept of cycle. In other words, the cycle of each bull and bear is about 3-4 years. If we look at the three-year rate of return, the next three years is another cycle with great probability. However, if you look at the one-year rate of return, it is within the cycle. High income this year, high income next year, or low income this year and low income next year. But if we catch up with the cycle switch, it will reach 15% this year, and the direct negative income will be next year.

To sum up, no matter from the ranking of fund managers, or can outperform the market, or absolute income, the fund manager you choose will not have more advantages than other fund managers. You choose a fund manager by luck, and the fund manager makes money for you by luck. Everyone is a good partner of luck.

So, if the fund falls, don't blame the fund manager, because he is just unlucky. And you, even more unlucky, met him.