Issue link: https://info.seic.com/i/1456554
10 Assuming past performance guarantees future results That's why you see "Past performance does not guarantee future results" on every investment marketing piece that mentions performance—because it's true. Looking at listings of managers ranked by their three-, five- or 10-year returns provides little insight into future performance. Some investors learn about the latest "hot" fund or stock and sell their current holdings to buy it. This isn't a consistently reliable method of investing. You may end up selling when you should be buying, and vice versa. Here's how investment decisions based on past performance alone can be a mistake. You can actually hurt your chances for attractive returns by chasing "hot" investments. Yesterday's top performer could be tomorrow's laggard. The chart below takes the top quartile of US Large Blend funds, based on based on 2015 to 2019 performance, and tracks their subsequent quartile rankings over the following five-year period (2020-2024). It also identifies where the top-quartile managers over the most-current five-year period (2020-2024) ranked in the previous five-year period (2015-2019) Ranking managers by their five-year returns provides little insight into future performance. SEI believes that a full assessment of qualitative and quantitative factors is required to identify skilled managers. Analyzing manager performance Past performance is not a guarantee of future results 2. SEI, Morningstar Direct, US Large Blend Universe. The percentages represent those from the top quartile that fell into the different quartiles in the next 5-year period. * 12% of top quartile funds from 2015 to 2019 are no longer included within the Morningstar Large Blend category. † 18% of top quartile funds from 2020 to 2024 did not have a full 5-year track record during the previous period. Past performance is no guarantee of future results. Years - Years - Years - Years - % % % % % % % % Top Quartile Top Quartile % † % *