Andrew Allentuck

Friday, February 23, 2001

Gordon Pape's 2001 Buyer's Guide to Mutual Funds
By Gordon Pape, Richard Croft and Eric Kirzner
Prentice-Hall Canada, 785 pages

The annual update of Mr. Pape's basic reference work just keeps getting better with the input of co-authors Richard Croft, a Toronto-based money manager, and Eric Kirzner, an academic who teaches finance at the University of Toronto. The 2001 edition offers detailed commentaries on all major and most minor mutual funds with Canadian-based vendors, leaving out some very small funds and such exotica as hedge funds sold by offering memorandum to investors able to pony up $150,000. A continuing feature is a list of funds categorized by "funds that should be doing better but aren't," "funds that have lost their way," a "disappointment of the year" (awarded to formerly illustrious Templeton Growth Fund). For all its research, the Pape-Croft-Kirzner collaboration remains an effort to predict funds' future performance from their past results. Research shows that fund performance lacks persistence, so much so that this exercise is not very useful. But for those investors who want to rely on past performance of funds to divine their future results, Mr. Pape's annual guide is definitive.