Andrew Allentuck

Friday, February 23, 2001

Core and Explore 2001: The Investing Rush Without Ruin
by Duff Young
Prentice Hall, 224 pages

Duff Young is one of the brightest, freshest financial analysts in Canada specializing in the occult science of picking winning mutual funds. He has faith that one can do this and, to that end, he offers much intelligence, many recommendations, and a troubling insight: "92 per cent of funds advertised [on the basis of performance] did worse over the subsequent three years after ht ads appeared than the three-year return quoted in the ad."

Mr. Young has latched on to the problem that mutual fund portfolios lack persistent performance. And since a high return for one period becomes a kiss of death for the next, what is an investor to do?

Use very long term moving averages, Mr. Young advises. "With this method, a mediocre fund that's been hot for only a few months has no place to hide." All true, save that funds may change managers, managers may move from one fund to another, fund mandates may change, and even strong portfolios can turn into laggards.

Duff Young believes in the promise of collective investing and with passion expressed analytically he conveys it in this intelligent, highly readable and very useful book. Built on previous books he has written in the Fund Monitor series, Come and Explore can be a first book on funds for the beginning investor or a valuable insight for the experienced mutual fund investor. If the advice is more tentative than that offered by other mutual fund books, the cautions against foolishness are more valuable. Anyone who invests in funds need to know what Mr. Young has to say.