Comparing the Performance of Mutual Fund Managers

Mutual fund managers are paid to make money for their shareholders. One measure of a manager's effectiveness is how often the fund out performs a broad market index like the S&P 500. Measuring Mutual Fund Performance discusses a methodology, based on the Complete Trading Model (CTM), which computes the frequency that a fund beats a market index.

The following example shows how frequently four mangers of the Fidelity Magellan Fund (FMAGX), a popular large cap fund, beat the the S&P 500.

The fund has employed four managers since 1977. Peter Lynch was a great stock picker and much of his tenure was during a rising stock market. Morris Smith served the briefest period but he made lots of money for his shareholders. Jeff Vinik had a rocky record before he resigned. Robert Stansky piloted the fund through the sharp market rise in the late 1990s and its subsequent decline.

Manager Performance - Fidelity Magellan Fund
Manager	Tenure	Frequency
Peter Lynch	May 1977 - May 1990	86.02%*
Morris Smith	June 1990 - June 1992	89.85%
Jeff Vinik	July 1992 - May 1996	70.30%
Robert Stansky	June 1996 - Present	76.17%
* Based on prices from September 1986 through May 1990.

Morris Smith and Peter Lynch did the best job beating the S&P 500 and Jeff Vinik had the poorest record.