“Put your money where your mouth is” certainly isn’t right
at the top of the list of pearls of wisdom on investing.
However, Morningstar recently reported that half of all
mutual funds are managed by folks who don’t have even a dime of their own money
invested in their own funds.
Morningstar, the high-profile investment research and
management company, says “After all, like a chef who won’t eat his own cooking,
a fund manager who doesn't personally invest in the fund he manages tells us
something important about confidence and commitment.” Funds whose managers have
$1 million-plus of their own cash invested have a better track record than
funds with no holdings by their own managers.
This detail about managers’ personal investments is
available in each fund’s Statement of Additional Information in the annual
report.
I think it’s rather dumb for a mutual fund manager to fail
to put her own cash into the fund. It's an integrity thing....
Copyright © Richard Carl Subber 2015 All rights reserved.
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