Just grin and bear it

Selecting managers with proven ability to limit downside and steer the fund to safety is essential in the current market volatility, and this knowledge can only be gained from experiencing the turmoil first hand

Bear markets are an expensive way to learn investments' lessons, but for some it is the only way. The ongoing market volatility has reiterated the importance of selecting managers with a proven ability to limit the downside and steer the fund to relative safety. Even though past performance is not a guide to the future, it is worth looking at factors that contributed to the outperformance of top quartile funds during the current market turbulence and, more importantly, establish whether the outperformance is repeatable. To get a sense of the damage a bottom-quartile manager can inflict up...