Investing: Young Funds

Fresh research shows the potential of nimble new stock funds--and how to spot the best ones

Common wisdom holds that you should never invest in a stock mutual fund that has less than a three-year record--no matter how well the fund performed the previous year or two. Even a monkey throwing darts has a 50% shot at superior returns over one year, and the ape's odds of doing well over two years remain uncomfortably high. Do you really want to take the chance that your fund manager is nothing more than a lucky primate? Of course not. But you don't want to rule out potential winners either. New evidence suggests that young funds hold more inherent promise...

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