Skip to Content
Rekenthaler Report

The Best (and Worst) Type of Fund Company

How funds are marketed matters greatly for investor returns.

Climbing the Ladder
I expected this column to examine investor returns for the major fund families--the dollar-weighted performance numbers that consider not only the results of a fund, but also the decisions of its shareholders. Funds that appreciate when they have few owners, and then decline after becoming popular, aren't useful. They might impress on paper, but they fail at the only task that matters: making money for people.

However, investor returns are a noisy signal even at the best of times, and these have not been the best of times. Sure, they have been splendid for investors--but not for an indicator that evaluates how well, or poorly, shareholders navigate bumpy markets. The mutual fund ride has been too easy, for too long. It has been nine years now since investors were tested. (Admittedly, that was a whopper of a test.)