When The Very Best Fail, Should You Be Trying?

Recently, I received an email from Russell Investments announcing that they had terminated several money managers and hired new ones. The funds that had changes in management were the Russell Emerging Markets Fund, the Russell International Developed Markets Fund, the Russell Global Infrastructure Fund, and the Russell Tax-Managed Mid- and Small-Cap Fund.

Russell is one of the leading firms providing consultant services to pension plans and other institutional investors, helping them to identify the money managers that can outperform appropriate benchmarks. As such, their main role is to perform due diligence in interviewing, screening, and ultimately selecting the very best of the best. You can be sure that their consultants have thought of every conceivable screen to find the best fund managers. Surely, they have considered not only performance records, but also such factors as management tenure, depth of staff, consistency of performance (to make sure that a long-term record is not the result of one or two lucky years), performance in bear markets, consistency of implementation of strategy, turnover, costs, and so on.

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