HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 7208
Location: Houston, Texas & Los Angeles, California
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 Posted: Mon Jun 16, 2008 8:25 pm Post subject: Morningstar on Managers' Fund Ownership |
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A must-read:
http://news.morningstar.com/articlenet/article.aspx?id=241183
| Quote: | A couple of years ago the SEC started requiring that fund companies disclose how much each fund manager invested in his or her fund. Morningstar has gathered manager ownership information about each and every U.S.-run mutual fund in its database.
The data allow us to take a more comprehensive look at how much managers invest in their funds in different asset classes. This gives us a benchmark for judging whether managers have greater conviction in their funds than their peers.
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When looking at the data (encompassing approximately 6,000 funds), the figures that jump off the page are those where no one invested a dime. In U.S.-stock funds, 47% report no manager ownership. And it gets worse from there. Fully 61% of foreign-stock funds have no ownership, 66% of taxable bond funds have no ownership, 71% of balanced funds put up goose eggs, and 80% of muni funds lack ownership.
There are really only two excuses for not owning a fund you run. First, if you run a single-state municipal-bond fund for a state other than the one you live in, it doesn't make sense to own that fund as you won't benefit from the tax breaks. Second, managers who are citizens of foreign countries have a good excuse if their country bars investment in U.S.-domiciled funds.
A number of foreign-stock funds are run by foreign citizens and that may account for the 4 percentage point difference between U.S.-stock funds and international-stock funds. |
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