When it comes to active mutual funds delivering on their promises, five things are key, and they all boil down to stewardship. So says Morningstar
guru John Rekenthaler
In his latest "Rekenthaler Report" column
, Rekenthaler ponders a host of studies about what factors lead to successful actively-managed mutual funds. Rekenthaler concedes that studies from the likes of AMG
, Capital Group's American Funds
, and Fidelity
appear self-serving, that doesn't mean the conclusions are wrong. He even draws on low-cost mutual fund evangelist Jack Bogle
, a frequent mutual fund industry critic, to prove the point.
Protecting shareholder monies by cutting expenses and turnover is being a good steward. So is having portfolio managers invest in their own funds, having the fund-company owners hold large stakes in their businesses, and restricting the company to doing only the business of investment management.
Perhaps some rising fundsters will take Rekenthaler's conclusions as a guide to how to reach the mutual fund equivalent of Garrison Keiller's fictional Lake Wobegon, where all the children are above average.
Neil Anderson, Managing Editor
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