Indeed, any time a star manager leaves, investors should not rush to follow. Typically, the outgoing manager's picks influence the portfolio for months, giving an investor time to judge how much the fund will change. Some fund companies have a history of not missing a beat when a star manager leaves. There also are tax considerations to weigh, since the star manager's old fund could generate a hefty tax bill if you sell and move along. It's smart to see if the manager's new digs will support the kind of success enjoyed by the old fund.
Every successful writer tries to duplicate what they've done, every big show has a spinoff.
They always sound great, but some are bombs that don't live up to the quality of the original. With so many good funds and good managers out there, no one should go rushing after a manager until they truly believe that this manager really is something special, and not just lucky. All rights reserved. Produced by Journal Interactive .