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

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

Rating:To Make the Case For Active Management, Eat Your Own Cooking Not Rated 0.0 Email Routing List Email & Route  Print Print
Monday, October 13, 2014

To Make the Case For Active Management, Eat Your Own Cooking

News summary by MFWire's editors

It's an old adage, that diners shouldn't trust chefs who don't seem to eat their own cooking, and the investing world has long applied the logic to mutual funds and their PMs, too. Yet new data from a mutual fund titan makes the case even stronger, and perhaps in the process offers hope for fundsters looking to fight for active management.

MarketWatch columnist Chuck Jaffe highlights new research from American Funds provider Capital Group [profile], which finds an active equity mutual fund portfolio, one where the funds have low expenses and PMs with big stakes, beat out a passive ETF strategy over the past 20 decades by a margin of more than 50 percent. Jaffe takes that and says that "How much money do you have invested in your own fund?" is the single most important question to ask any mutual fund PM.

Tim Armour, management committee chair at the Los Angeles-based mutual fund firm, mentioned the same research last week in an interview about the near-stop in American Funds' net outflows. Steve Deschenes, director of product development for American Funds, tells Jaffe about the findings.

Jaffe points to Brian Posner, former Fidelity PM and former ClearBridge funds chief, as an example of an exec for whom investing in one's own funds was important. Indeed, at ClearBridge, Jaffe writes, Posner required his PMs to invest in their own funds.

The columnist almost seems to be calling on the SEC or Congress to require better disclosure of PMs' fund investments. Such disclosure is currently part of the "statement of additional information" released by each fund.

Perhaps fundsters whose PMs invest heavily in their own funds and who have below average fees, should shout it from the roof tops. The folks at Capital Group are taking a stab at it. 

Edited by: Neil Anderson, Managing Editor


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

0.0
 Do You Recommend This Story?



GO TO: MFWire
Return to Top
 News Archives
2024: Q2Q1
2023: Q4Q3Q2Q1
2022: Q4Q3Q2Q1
2021: Q4Q3Q2Q1
2020: Q4Q3Q2Q1
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. 1997-2024
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use