When it comes to choosing an investment manager, looking for a hot hand is likely to leave you out in the cold.
The old market adage that past performance doesn't guarantee future results literally has never held more true, as no large-cap managers who beat the market indexes they use as benchmarks in 2013 managed to do so three years later.
That's right — none of them. It was zero, according to a study from S&P Dow Jones Indices.
Research on the performance of active investment managers in 2013 showed that of 1,034 large-cap funds, just 204, or 19.7 percent, topped the S&P 500's performance that year. Only 15.7 percent of the total managers outperformed the following year. In 2015, the number fell to 5.9 percent.
By 2016, not a single manager who outperformed in 2013 was able to beat the benchmark.