Representatives from the largest members of the $7.4 trillion mutual fund industry gathered this week at the Morningstar conference in Chicago to devise new strategies aimed at putting widespread scandals in the past, Reuters reports. Morningstar Managing Director Don Phillips, a pivotal figure in the mutual fund research industry, said he believes that investors are at risk of being distracted by reports of mutual fund scandals and subsequently failing to prepare for fundamental challenges, such as rising interest rates. "There are not obvious hiding places. Money markets and cash are very unattractive. Fixed income doesn't look like much of a refuge," Phillips said.

The reputation of the mutual fund industry was severely bruised after New York Attorney General Eliot Spizter unleashed a tidal wave of charges accusing prominent asset managers of market timing and late trading activities, and one of the main focuses of the meeting was restoring that reputation.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.