January 2014 Investment Insight, "Past Imperfect: Why Using Past Performance as the Primary Indicator of Future Performance Is a Flawed Strategy"

Abstract

This issue of Investment Insight uses data over a five-year period to show why using investment managers' past performance as the primary indicator of their future performance is a flawed strategy. By the end of the five-year period, only 11 percent of the top-quartile managers managed to stay in the top quartile. Less than 20 percent were able to stay in the top half.

Segal Rogerscasey Canada offers strategies for selecting successful managers who can consistently beat the benchmarks. The issue identifies five desirable factors.