The Fallacy of Active Investing
Many believe that by selecting top managers based on past performance, peer group ranking or third party ranking system this will lead to similar future success. A 2010 study revealed that those funds receiving the highest 5 star rating by Morningstar, actually delivered the worst results over the next 3 years. By contrast, 1 star managers delivered the best results.
Source: The Vanguard Group 2010.