People buy into mutual fund for the sake of diversification. In order to outperform the market, mutual fund managers have to do something other than owning the market index. As John Bogle showed in his book Little Book of Common Sense Investing,
mutual funds with long-serving portfolio managers and records of consistent excellence are the exception rather than the rule. Bogle is big on advocating index fund, but he would admit that there are exceptions --- Jean-Marie Eveillard
of the First Eagle Global Fund is one of them.
Since its inception on January 1, 1979, Eveillard returned 14.2% on average per year, beating the MSCI World Index hands down. He has since stepped and become an advisor of the fund, passing the torch to Mathew McLennan and Abhay Deshpande, who pledged to follow the same strategy. One of the things the managers do differently is they also hold a healthy portion of their asset in gold related stocks. Continue Reading »