Can’t some of the really good managers outperform on a consistent basis (persistency)?

Answer: According to the S&P persistence scorecard relatively few funds can consistently stay as top performers in their respective asset class. Of the relatively few funds that outperform, few can do so repeatedly. Across all funds, the incidence of 3 years or 5 years of consecutive top half performance is generally less than that expected by random chance. There is little evidence that managers who have outperformed can predictably continue to outperform. If managers cannot consistently outperform, then there is no use trying to identify them in advance. Manager selection and the hiring or firing of managers is a futile exercise. The question then becomes how do we know which funds will outperform in any given year? The answer is, we don’t know. Even if we did, based on the data, it is not very probable that the same fund will consistently be a top performer. Thus, there will likely be adverse tax consequences and load fees from changing funds year to year.