Secrets of the longest-lasting mutual funds

Robust strategies, strong planning and a healthy suspicion of fashion help longevity

The world’s longest surviving mutual fund is almost 100 years old (MFS Massachusetts Investors, launched in 1924)! If it’s good performance that enables this and other similarly “antique” funds to survive and thrive, what are they doing that is delivering that performance for so long? What can we learn from them?

Looking at the list showcased here, it’s clear that “a robust and enduring investment case” is first on the list – the funds (patiently) exploit a particular dynamic in core asset classes that isn’t a fad but a fundamental truth of the world and the human element in investment decision-making.

And succession planning – both in terms of quality of personnel and their buy-in to the underlying investment methodology, but also the way that succession is communicated to investors. Slowly, gradually, seamlessly, as an evolution of seniority.

These are vital lessons for us all, including us marketers. Slow and steady wins the race. MFS Massachusetts Investors has delivered 9.22% gross annualised since inception. Remarkably, the fund still holds some of its first investments. Now that’s long-term! Congratulations to MFS (and the rest) on a truly remarkable achievement.

And one final thing – I notice that a handful of groups with funds dating back to the 1930s were unable to provide performance data back to inception. No comment!

Note on the FT:

Theirs is a subscription model. If you don’t have corporate access, sign up for their emails (you can choose exactly what you receive and how often) and that gets you free access to eight articles a month. FTfm on Mondays is all you need to keep up with the big picture developments in our industry, and be sure to catch the always enlightening Merryn Somerset Web every Saturday in FT Money.

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