Skill vs luck - how many winners do you need?

Richard Skelt | Fidelity Worldwide Investment | 17 July 2013

Suppose I am a holder of an investment fund that over the last 36 months has outperformed its benchmark or performance hurdle by 2% per year. This performance could have been generated by either a broad spread of positions generating on average a 2% return or, alternatively, the return could have come from a small number of positions that have paid off "big time". Imagine that this fund has 30 positions. At one extreme, each of the 30 positions might have gen...