Surviving the bear run: down but not out

As the assets of the Indian mutual fund industry crossed Rs5 trillion, riding on a stock market that went up for five years in a row, a bunch of fund mangers gained the status of rock stars

In 11 of the 13 years between 1977 and 1990, Peter Lynch, then manager of Fidelity Magellan Fund, beat the S&P 500 Index benchmark, offering an average annual return of 29%. That made the rather obscure fund grow from $18 million (Rs88.2 crore today) when Lynch took over to $14 billion by the time he retired from active management.

Bill Miller, who managed Legg Mason Value Trust, is another iconic fund manager. He beat the market for 15 consecutive years, till his run came to an end in 2006.

“Of course, anyone can get lucky for a short period of time. But consistent outperformance over long periods is probably evidence of skill. Otherwise, what would skill be?” asked Miller in a July 2007 interview to ‘Money’ magazine’s Jason Zweig.

As the assets of the Indian mutual fund industry crossed Rs5 trillion, riding on a stock market that went up for five years in a row, a bunch of fund mangers gained the status of rock stars. At least five of them not only generated phenomenal returns in some of the funds they managed—in some instances generating as much as 150% annual returns—but also consistently beat the benchmark index, the Bombay Stock Exchange’s Sensex, during the bull run.

Click here for the full story.

  • Also See Rock Stars of Bourses (PDF)
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