Are most investment funds built to last, or simply short-term fads?

Are funds built to last or short-term fads?

clock • 9 min read

With 60% of the European fund universe less than a decade old, Christopher Traulsen, director of fund research, EMEA at Morningstar, asks if managers need to focus less on creating products to capture flows in specific sectors, and more on delivering durable funds that retain clients

One would think it would benefit fund houses to build their offerings to last. After all, investment funds are meant to be long-term savings vehicles helping investors to gain exposure to a broader portfolio of securities than they would otherwise be able to achieve for themselves. While most of the funds universe today has done so - it has only done so to an extent.   Across Europe, Morningstar tracks 7,378 funds that were incepted before 2000, out of a total present universe of 36,325 live funds. Of those, 14,411 funds have been in existence for at least a decade. In other words, r...

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