InvestmentNews' Jeff Benjamin picked up on numbers from Morningstar which show that only around 40 percent of fund managers put money in their own funds. Of those that do, around 60 percent are stock fund managers.

Portfolio manager investment is one of the factors Morningstar looks at when it does its stewardship analysis.

An example of a fund firm where manager investment is not a priority is Vanguard Group, according to Laura Lutton, editorial director at Morningstar. Eighty-one out of the 114 distinct Vanguard funds tracked by Morningstar have no investment from the PM.

Vanguard spokeperson John Woerth told InvestmentNews that the PM investment analysis is "sort of misleading" and "an imprecise mechanism of evaluating a fund."

He told the pub that Vanguard has manager incentive and penalty compensation structures in place on most funds. The company deems the structures as a way to match PMs' interests with those of fund investors. He added that in some cases, PMs would choose to invest in a separate account version of the fund, and that doesn't appear in the SEC filings. 

Edited by: Armie Margaret Lee


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