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Persistence Scorecard Does past performance matter?
BY Berlinda Liu


• The S&P Persistence Scorecard attempts to distinguish a manager’s luck from skill. One key measure of successful active management lies in the ability of a manager to outperform his peers consistently.

• This report’s results show that, irrespective of asset class or style focus, few fund managers consistently outperformed their peers.

• For funds categorized as top performers in September 2017, 47% maintained their top-quartile performance the subsequent year. However, there was a dramatic fall in persistence afterward—just 8% of domestic equity funds remained in the top quartile in the three-year period ending September 2019. This result (8%) is consistent with the notion that historical performance is only randomly associated with future performance.

• Smaller-cap equity funds recorded lower persistence compared with results from six months prior—mid-cap persistence dropped to 7% from 14%, and small-cap funds sank to 11% from 23%.

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