Image Credit: Alex Nabaum
By Jason Zweig | Dec. 20, 2019 10:11 am ET
Rip van Winkle, who took a drink from the wrong keg and spent the next 20 years snoring, was a newbie at sleeping. Let me tell you about a mutual fund that bought a few stocks 84 years ago and hasn’t moved a muscle ever since.
The fund, known today as Voya Corporate Leaders Trust, was launched Nov. 18, 1935, with its hands tied. It would hold the identical number of shares in each of its 30 stocks. It could never buy new holdings or sell out of its existing ones unless a company went bankrupt, underwent a merger or became “inadvisable” to keep. Corporate Leaders became a portfolio frozen in time.
Not at all….
To read the rest of the column:
For further reading:
Benjamin Graham, The Intelligent Investor
Jason Zweig,The Devil’s Financial Dictionary
Jason Zweig, Your Money and Your Brain
Jason Zweig, The Little Book of Safe Money
Articles and other resources:
John Rekenthaler, “The Strange and Happy Tale of Voya Corporate Leaders Trust” (Morningstar) Blogpost that argues persuasively for the importance of luck in the success of this quirky fund.
Kevin McDevitt, “Revisiting 80 Years of Sloth” (Morningstar) Thoughtful look at the history and design of Voya Corporate Leaders.
Shahin Shojai, George Feiger, and Rajesh Kumar, “Economists’ Hubris: The Case of Equity Asset Management” (SSRN) Article that proposes measuring the trading decisions of investment managers against how their portfolios would have performed if they’d never traded at all.
Andrei Shleifer, Josef Lakonishok, and Robert Vishny, “The Structure and Performance of the Money Management Industry” (Brookings Institution) Analysis showing that major pension funds would have performed nearly one percentage point better annually by preventing their investment managers from making any trades.
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