n South African Journal of Business Management - The persistence of active fund management performance

Volume 36, Issue 2
  • ISSN : 2078-5585


This study focuses on the performance persistence of equity funds in the South African Unit Trust Industry against its appropriate index benchmark (ALSI) over the period 1988 to 2003. A few funds exhibited extraordinary persistence - either in out-performing or under-performing. In general it was found that over the short term (month-to-month and quarter-to-quarter basis) there was a tendency that the current performance of a fund would be repeated, with a greater tendency among the top performing funds to remain a top performer. <br>However, when the persistence of fund performance was measured on a year-to-year basis, less consistency among funds was identified. The decile ranking movement of a fund - upwards, downwards or sideways - became more random in nature. When the forward-looking period was extended to three years, however, the chances that the fund would have stayed in the same decile became very slim. <br>Herein lies the danger of placing your trust with one active manager only; over the long run the performance ranking of managers can assume a random nature if manager skill is not persistent.

Loading full text...

Full text loading...


Article metrics loading...


This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error