The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:Seven Original Sins Doom Mutual Fund Boards: Smartmoney Not Rated 1.0 Email Routing List Email & Route  Print Print
Monday, June 11, 2012

Seven Original Sins Doom Mutual Fund Boards: Smartmoney

Reported by Sean Hanna, Editor in Chief

There are seven deadly sins for mutual fund boards, writes Smartmoney in a feature article on why Schwab's YieldPlus fund turned into a debacle for shareholders.

The article is exhaustive and includes interviews with a wide variety of board members, industry experts and academics.

It also takes a dim view of the value of mutual funds boards. That view may be best summed up by University of Virginia law school professor John Morley who says: "The real puzzle isn't why these safeguards don't work. It's why anybody thinks they could work."

Those sins are:

  • No investors allowed (on boards)

  • Pay -- but no say (board members are well paid for few duties)

  • Heavy homework (board members are provided pounds of material for their meetings, more than they can comprehend).

  • No limit (fees charged by fund advisors are too high, and boards are afraid to limit them. Proof is the advisors' average margins of 40 percent on average).

  • Family ties (even independent board members are not independent enough).

  • Lifetime security (board members keep their seats for more than 20 years on average).

  • Performance anxiety (most funds are trailing their benchmarks, and boards are not acting).

    Take some time to read the rest if you want to stay informed on what the popular financial press thinks of mutual fund boards. 

    Stay ahead of the news ... Sign up for our email alerts now

  • 1.0
     Do You Recommend This Story?

    GO TO: MFWire
    Return to Top
     News Archives
    2019: Q4Q3Q2Q1
    2018: Q4Q3Q2Q1
    2017: Q4Q3Q2Q1
    2016: Q4Q3Q2Q1
    2015: Q4Q3Q2Q1
    2014: Q4Q3Q2Q1
    2013: Q4Q3Q2Q1
    2012: Q4Q3Q2Q1
    2011: Q4Q3Q2Q1
    2010: Q4Q3Q2Q1
    2009: Q4Q3Q2Q1
    2008: Q4Q3Q2Q1
    2007: Q4Q3Q2Q1
    2006: Q4Q3Q2Q1
    2005: Q4Q3Q2Q1
    2004: Q4Q3Q2Q1
    2003: Q4Q3Q2Q1
    2002: Q4Q3Q2Q1
     Subscribe via RSS:
    Raw XML
    Add to My Yahoo!
    follow us in feedly

    ©All rights reserved to InvestmentWires, Inc. 1997-2019
    14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
    Privacy Policy :: Terms of Use