Do you, dear reader, remember when I wrote that I would be more impressed with the amount of money a fund manager has invested in their own mutual fund that they personally manage then the number of stars Morningstar awards? Well, the recent Morningstar ranking of the top 30 fund companies just came out and there were no surprises. The funds that you expected to be on top were and those that you don’t hear too much about weren’t.
PIMCO Funds lead with the best return and why not? They are fixed income specialists and have the largest mutual fund that is a bond fund. With equity markets barely treading even or worse for the year it isn’t a surprise to see solid numbers being posted by the fixed income folks at PIMCO. Bill Gross heads their investment management team and he’s considered the brightest fixed income manager anywhere.
The interesting thing is that PIMCO managers do not place a significant amount of their own money in the funds they manage. That honor goes to the people at Dodge & Cox followed by American Funds and Franklin Templeton.
The number one fund company overall in the Morningstar rating is T Rowe Price. Morningstar’s criteria involves more than total return to have a fund family ranked. The #2 is American Funds followed by Dodge & Cox, Vanguard, MFS and Janus. Franklin is #7 but there is a lot of faith amongst the investment management talent and the average manager has over $500,000 invested in their own funds. American Fund managers have close to $600,000 of their own money invested. T Rowe Price people are either not paid very well or are doing other things with their money. Even though they rank as the overall #1 fund firm the average fund manager has only slightly more than $200,000 invested in their own funds.
When you come right down to it some of this reporting is darn embarrassing. Consider the #30 fund family ranked and that is ING Funds. The average fund manager tenure is an astonishing 20 years but the average investment per fund manager into their own cooking is a dismal $13,700. As I said, sometimes it is embarrassing but ING Funds is #30 out of 30 and maybe that says it all.
If you want to see all the numbers and how all the reported fund families rank go to www.morningstar.com.
If you have questions call Paul @ 877 783 7080 or write him at pstanley@westminsterfinancial.com. Share this blog with someone who cares about their money.
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