Mutual fund managers who invest in companies with strong corporate governance profiles produce better long-term returns.

That was the key finding of a recent research report examining the relationship between governance and performance. The joint study from Lipper and Governance Metrics International (GMI) showed that within the large-cap domestic equity fund universe, funds overweight well-governed companies have outperformed the average fund over three-year and five-year periods. Furthermore, buying into companies with quality management teams has afforded long-term holders with lower risk over time.

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