Earning trust, and maybe strong returns
These are iffy times in the market, but you can at least take comfort that your mutual fund managers have their “skin in the game,” too, right? says Chuck Jaffe in MarketWatch. “Alas, all too often,” no. Morningstar did an analysis of its Morningstar 500 funds, and managers had nothing invested in 46 percent of their own domestic stock funds, 60 percent of their foreign stocks funds, and 70 percent of their blended funds. “Ouch. That’s a lot of managers who are going out to eat, rather than eating their own cooking.” And perhaps it’s not surprising, but the funds with significant manager ownership performed better. Maybe mutual fund firms should give managers their bonuses in shares of their own funds.
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