The Factsheet Tricks, 5 of 10
Show the winners
From a large family of funds, advertise the best performers.
What it is
A provider with many funds will always have some with a great recent record, by skill or by luck. Advertising those, and not the others, makes the whole family look better than it is.
Why it works
- Fund companies tend to advertise their best performers, and investors, even professionals, often fail to account for that selection.E10
- Funds advertised after a strong run did not, on average, keep outperforming, but they did attract more money.E9
- None of the top-quartile US large-cap funds of 2021 stayed in the top quarter every year through 2025.E3
Example Growth FundFund in focus
Illustration, not a real fund
Our star fund: top of its category last year
And the provider's other funds? None of 2021's top-quartile US large-cap funds stayed in the top quarter every year through 2025.E3
How to spot it
- Ask how the provider's other funds did over the same period.
- Treat a recent star record as a weak guide to the next few years.
What OpenFactsheet does
Applies the same standard analysis to any fund, not just the star.
Sources
- E10 Koehler, J.J. & Mercer, M. (2009). "Selection Neglect in Mutual Fund Advertisements." Management Science 55(7), 1107–1121.
- E9 Jain, P.C. & Wu, J.S. (2000). "Truth in Mutual Fund Advertising: Evidence on Future Performance and Fund Flows." Journal of Finance 55(2), 937–958.
- E3 S&P Dow Jones Indices (2026). U.S. Persistence Scorecard, Year-End 2025.
Share this trick
Your money deserves more than a sales pitch. These are techniques, not accusations. We don't name or rate any fund or firm.