Investopedia

Continue to Site »

Management Tenure

Filed Under »
Dictionary Says

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 Says

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.

Articles Of Interest

  1.

    Is Your Mutual Fund Safe?

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

  2. 3 Alternative Ways To Assess Your Investment Manager

    Find out whether your funds are being managed according to your goals.

  3. Should You Follow Your Fund Manager?

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

  4. Turnover Ratios Weak Indicator Of Fund Quality

    This indicator is not as important as some investors might think.

  5. Women: Invest In Your Financial Literacy

    Learning about money may seem intimidating, but it's not as hard as it looks.

  6. 4 Behavioral Biases And How To Avoid Them

    Here are four common common behavioral biases for traders and how to minimize their effects on your portoflio.

  7. Mutual Fund Ratings: Crucial or Insignificant?

    Mutual fund ratings can help investors, but they have their drawbacks as well.

  8. Multi-Asset Funds Or Your Own Mix?

    The underlying concept of mixed funds is very appealing. Discover if you're better off with professional management or creating a mixed fund of your own.

  9. 5 ETFs Flaws You Shouldn't Overlook

    Despite their popularity, exchange traded funds have some drawbacks that investors should know about.

  10. Which Mutual Fund Market Cap Suits You?

    Different funds invest in companies with different market caps. Find out which is right for you.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Validation Period

    The amount of time necessary for the premium on an insurance policy to cover the commissions, the cost of investigation, medical exams and other expenses associated with the issuance of the policy.

  2. Winner's Curse

    Because of incomplete information, emotions or any other number of factors regarding the item being auctioned, bidders can have a difficult time determining the item's intrinsic value. As a result, the largest overestimation of an item's value ends up winning the auction.

  3. Glocalization

    A combination of the words "globalization" and "localization" used to describe a product or service that is developed and distributed globally, but is also fashioned to accommodate the user or consumer in a local market.

  4. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  5. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  6. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.
Trading Center