I've posted on the blog and written articles about the perils of choosing mutual funds based on recent performance. It's refreshing to see that a mutual fund company is throwing up the yellow flag on a few of their own funds.
Vanguard writes, "Strong 2009 performance warrants yellow flag." They highlight several of their mutual funds that have performed well year-to-date and caution chasing those hot returning funds.
In fact, shortly after the article, they closed one of those hot performing funds. Vanguard Capital Value Fund has returned 68.5% year-to-date and is not accepting money from new investors.
Read my related article entitled, "Should You Buy Last Year's Top Performing Funds?"