And The Winner Is ...

To prove the power of our approach, we conducted a test of our method against a traditional fund selection approach. We chose randomly from a 10,000 fund population of which 75-80% do not beat the S&P 500 but 20-25% do. Using appropriate scientific techniques, we discarded 7,500 - 8,000 mediocre performing funds leaving 2,000-2,500 superior performing funds using the S&P 500 as our benchmark. We then chose randomly from the superior fund group and compared the performance of this group with the larger mediocre group. It became clear the difficulty for the investor in choosing enough superior funds is that the mediocre fund group, representing 3-5 times superior funds, are evenly distributed over the entire population and, therefore, not easily found.

To imitate traditional practices of selecting funds, a random number generator chose 360 funds made up of 30 funds in each of 12 time intervals for periods of 12, 24, & 36 months from an open-ended fund population of 82,000. The tests were based on a prospective $10,000 investment. The Value Line Survey Mutual Fund Survey for Windows was used as a performance data source and Market Watch was used as a net asset value source.

To apply our method of analyzing past performance, 360 funds made up of 30 in each of 12 time intervals were objectively selected using the Regen Associates method, as likely to perform well, and $10,000 prospectively invested in them. They were chosen, prospectively, from a 41,000 open-ended fund population, and the data and net value for these funds were collected from the same sources.