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Fund Spy

Should Fundholders Fret When the Longest-Tenured Managers Leave?

When experience walks out the door, whether or not to sell depends on the circumstances.

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In the sometimes topsy-turvy ranks of mutual fund management, it can be tough for investors to find good funds with long-tenured managers. In fact, the average mutual fund manager stays just less than seven years on a fund. Why? A successful manager may leave to start his own firm or jump ship to a competitor. Or a fund without much in assets may merge into another fund. Or a rising star may be promoted to a larger fund at the same shop, and so on.

However, a small percentage of fund managers have stuck with one (or more) funds for the long haul. In fact, 59 funds (excluding share classes and only considering funds that still exist today) boast portfolio managers with tenures of at least 25 years.

Of course, the downside is that with really long tenure, the manager could well be near retirement. But even so, there are good reasons to invest with managers who have worked through a few market cycles. Below are some general tips, as well as some ideas about specific funds with long-tenured managers.

Bridget B. Hughes does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.