Numerous studies have documented that, when it comes to equity and fixed-income mutual fund managers, there is little evidence of performance persistence, except in the case of particularly bad performance. These studies suggest good performance could be attributable to luck, rather than to skill, and bad performance can result from incompetence or excessive management fees.

Of course, CDO and mutual fund managers differ in their job tasks and skill sets. A high-yield mutual fund credit analyst with a sterling performance record might wither as a CDO manager when faced with the task of managing a set of liabilities. In fact, during the late 1990s several mutual fund companies with strong high-yield performance records branched into CBOs and discovered the hard way that success in the flexible world of mutual fund management did not help them when managing the numerous constraints of CBOs.