The Wall Street Journal last Sunday (that can be found here) about the top stock funds in 2020. They featured the Morgan Stanley Inception fund, which gained 150.6 percent, and pointed out that it surged 19.5 percent in the last few weeks of the year.

The manager discussed how they had more than their fair share of investments in e-commerce, people working from home, and streaming entertainment. The top ten holdings account for 55 percent of the fund, which explains the outsized performance.

Maybe I’m just jealous of those mega-returns, but I wondered two things. First, why not feature the best two funds from last year? The Baillie Gifford International Concentrated Growth fund gained 299.9 percent, which is twice as good as the Inception fund! Or the GMO Special Opportunities fund, which was up 195.0 percent. I don’t know the answer.

My second question was why there was no article that featured the funds that lost the most? I’d be interested to hear what their manages said, but suspect it would go like this: we thought these stocks were cheap, took big bets, and lost. That’s what the big winner said, but sounded smart since it worked.

Outside of the funds that short the market with leverage, it looks to me like the worst-performing fund was the Highland Small-Cap Equity fund, which lost almost half of its value.

I don’t know anything about this fund and don’t knock their performance, my point is that the media sensationalizes the winners. Each year, some funds take big bets of all kinds. A few will be big winners, but many will not.

More balanced coverage would, in my opinion, talk about the winners and losers without making the winners look like heroes or the losers like goats (in fairness, you don’t see much of that).

And, the article about the winners should make mention of the tough times that the fund went through. The Inception fund was in the 99th percentile last year, but in 2014, 2015, and 2016 it was in the bottom fifth percentile.

Last year was so good that it put the fund into the 97th and 98th percentile over the 10- and 15-year trailing returns and too many people see that as good ‘long-term’ results even though most of the really good part came in just one year.

The problem is that it isn’t much fun to read about balanced strategies that don’t take big bets and aren’t at the top – or the bottom – of the heap.

Maybe I shouldn’t blame the media – I read the article, looked up the winning fund, and wrote an article about it. I guess it’s just human nature to be curious, but we should remember that it’s just entertainment, not a sound way to find investments.