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Better Stewardship and Better Returns Go Hand in Hand

A new Morningstar study suggests that investors often benefit when they seek out firms with strong stewardship characteristics.

new study from Morningstar looked at more than 750 asset managers offering U.S. mutual funds and found that those with stronger fund manager tenure, retention, and personal investments in fund shares also delivered better returns for fundholders. The same is true for firms charging lower fees for their funds.

The study suggests that better stewards of capital have provided better investor experiences, so Morningstar looked at whether the firm-level statistics featured in the study were independently pointing to that conclusion, or were highly correlated with one another. The study found that more data is better: The data points provide independent signals and were not highly correlated. This increases Morningstar's confidence in the study's results and suggests that investors often benefit when they seek out firms with strong stewardship characteristics.