2. Outperforming the market: Let’s see if any fund managers can outperform the market. Are fund managers who outperform the market also good fund managers?

The following statistics show the relationship between each fund manager's 3-year return rate and the next 3-year return rate.

Among them, 1-4 respectively represent that the annualized income exceeds the Shanghai and Shenzhen 300 Index by 15%, 5%-15%, 0-5%, and is lower than the index.

It can be seen that the fund manager's return rate exceeding that of the CSI 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 will most likely underperform in the next three years.

Broad market.

In other words, there is no inevitable relationship between outperforming the market.

So, do fund managers who can often outperform the market have a greater chance of winning in the future?

The conclusion is still not great.

Fund managers who have outperformed the market five times in the past five years will most likely be at the same level or lower than the market in the next three years.

3. Absolute Return: What if I pursue absolute return? I only look at whether the fund manager can bring me stable returns?

Can fund managers with an annual return of more than 15% bring better returns in the future?

We discovered an interesting phenomenon here, that is, after the return rate in the past year reached 15%, there was a two-level differentiation in the next year. In the past 3 and 4 years, when the return rate reached 15% or above, there was a clear reversal.

?

What does this mean?

Are fund managers really capable of generating short-term returns?

No, my understanding is that it embodies the concept of cycle.

In other words, each bull-bear cycle lasts about 3-4 years.

If you look at the three-year rate of return, there is a high probability that the next three years will be another cycle.

However, if you look at the one-year return rate, it is within the cycle. If the return is high this year, the return will be high next year, or if the return is low this year, the return will be low next year.

But if we catch up with the cycle switch, it will reach 15% this year and directly negative returns next year.

To sum up, no matter in terms of fund manager ranking, whether it can outperform the market or absolute returns, the fund manager you choose will not have more advantages than other fund managers. You choose the fund manager based on luck, and the fund manager will give you the money based on luck.

When it comes to making money, everyone is a good partner of luck.

Therefore, if the fund falls, don't blame the fund manager, because he is just unlucky.

And you, you are even more unlucky, you met him who was unlucky.