The Best Mutual Funds are Cheap and Boring

Cheap mutual funds may save investors from their worst impulses, says an article in Barron’s. According to the article, investors in the highest-cost funds “suffer the double whammy of first being set back by high fees, and then buying and/or selling at the wrong time,” citing supporting data from a recent Morningstar study. One theory, the article explains, is that “investors who buy low-fee funds are smarter than their peers and don’t overtrade.” Another, says CFRA… Read More

Low Costs and Manager Ownership Attributes of Best Performing Funds

Investment News reports on a study by American Funds that “stud[ied], over multiple time periods, [] the entire Moringstar Inc. fund database” and found that screening for two key attributes helps to distinguish funds with “better average returns than the average of all active funds and their respective indexes.” These are: “Lower fund expenses,” and “Higher portfolio manager ownership of the fund.” The study found that over “1-year rolling periods over each month of the… Read More