The Los Angeles Times reports:

A new report from Morningstar Inc. looks at fund managers’ personal holdings of the funds they run, and concludes: “The number of managers showing no faith in their process is staggering.”

“When looking at the data, the figures that jump off the page are those where no one invested a dime,” says Russ Kinnel, Morningstar’s director of fund research in Chicago.

Among the nearly 6,000 stock and bond funds that Morningstar analyzed, 47% of the U.S. stock portfolios reported no manager ownership, Kinnel says.

That’s pathetic enough, but “it gets worse from there,” he says. “Fully 61% of foreign-stock funds have no ownership, 66% of taxable bond funds have no ownership, 71% of balanced funds put up goose eggs, and 80% of muni funds lack ownership.”


There is definitely an interesting comparison to be made between the large fund shops and the large fast food chains: they both market a promise of something better and mass produce mediocrity.

Still, McDonald’s ninety-nine billion served can’t compare to the fund industry’s ten trillion squandered.

Source:
Not even a penny? Report says most mutual fund managers don’t invest in their own portfolios
Tom Petruno
The Los Angeles Times
June 16, 2008