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.

Rekenthaler concludes:

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. 

Edited by: Neil Anderson, Managing Editor


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