When I pick a fund, I look at 10Y NAV graph. It doesn’t really say anything reliable about mgr skill. http://www.ft.com/cms/s/0/1f8260aa-9936-11e1-9a57-00144feabdc0.html#axzz3821P2Up3 points out

“On the rare occasions where the manager’s been around long enough that the data alone would be enough to make an assessment, the manager probably isn’t doing the same thing any more,” — Cliff Asness of AQR.

What I hope the NAV graph does show is diversification from S&P. I basically assume the mgr is fundamentally passive despite her active mgmt, so I’m buying the asset class Not the mgr skill.

Additionally, if an asset class (say, Malaysia or Healthcare) is hopelessly correlated with S&P but more volatile or higher growth (high beta), I would buy the asset class, too. Again, i am not buying the mgr skill.