Management Tenure

AAA

DEFINITION of 'Management Tenure'

The length of time that a manager(s) has been at the helm of a mutual fund. A long-term fund performance record, preferably of five to 10 years, is a key indicator of a fund manager's investing abilities.

INVESTOPEDIA EXPLAINS 'Management Tenure'

Mutual fund investors are best served by investment managers who have proved themselves over an extended period of time. The more closely matched a manager's tenure is with a solid fund performance record, the better.

For example, let's compare two different funds: The XYZ Fund has an annualized average 10-year total return of 11% and has been run by the same manager over that period. The ABC Fund has the same 10-year annualized average total return of 11%, but it has had two different managers. One's tenure covered the first nine years and the second has only been on the job for one year. Will the second manager be just as good as the first? We hope so, but making a decision on current managerial quality is difficult because fund performance and managerial tenure don't match.

For obvious reasons, mutual funds under team management or index funds are not subject to questions concerning manager tenure.

RELATED TERMS
  1. Peter Principle

    An observation that in an organizational hierarchy, every employee ...
  2. Branch Manager

    An executive who is in charge of the branch office of a bank ...
  3. Asset Management

    1. The management of a client's investments by a financial services ...
  4. Manager Of Managers - MOM

    A class of financial intermediary that hires professional investment ...
  5. Active Management

    The use of a human element, such as a single manager, co-managers ...
  6. Fund Manager

    The person(s) resposible for implementing a fund's investing ...
Related Articles
  1. Options & Futures

    Is Your Mutual Fund Safe?

    You might be carrying more risk than you think if your fund invests in derivatives.
  2. Personal Finance

    3 Alternative Ways To Assess Your Investment Manager

    Find out whether your funds are being managed according to your goals.
  3. Mutual Funds & ETFs

    Should You Follow Your Fund Manager?

    Learn how to tell if a fund in flux is still a suitable investment.
  4. Retirement

    Turnover Ratios Weak Indicator Of Fund Quality

    This indicator is not as important as some investors might think.
  5. Mutual Funds & ETFs

    How To Apply Technical Indicators To Mutual Funds

    Mutual funds do not readily lend themselves to technical analysis, but investors can use common indicators to evaluate mutual funds as easily as stocks.
  6. Professionals

    Should Investors Nix Actively Managed Funds?

    Index fund returns are on a tear but does this mean investors should nix actively managed funds?
  7. Mutual Funds & ETFs

    Are These 2015's Most Promising Mutual Funds?

    For 2015, the mutual funds covered below are likely to offer more upside potential than the vast majority of mutual funds in existence.
  8. Mutual Funds & ETFs

    Why These Could Be 2015's 10 Best Mutual Funds

    These 10 mutual funds offer strong potential for 2015. Here's why.
  9. Professionals

    State Street Slashes ETF Fees

    State Street has slashed fees on 41 of its ETFs in the wake of historic redemptions.
  10. Stock Analysis

    Will Spinoffs Give American Capital A Pop?

    American Capital shareholders have long awaited a plan to spin off the company's investments from its prized asset-management business.

You May Also Like

Hot Definitions
  1. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  2. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  3. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  4. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  5. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  6. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
Trading Center