Unpopular Funds

Fund popularity can be measured by percentage change in net cash flow over a stated period. Barbee (1999b) discovered unpopular funds had higher returns than popular funds from 1987-1998. Specifically, over 3-year periods, unpopular funds typically outperformed 78% of the time. In a separate paper, Ibbotson concluded picking funds that will outperform their benchmark is easier than trying to determine what investment style will perform best.