Mutual fund companies have been shaping up in the past three years following the trading scandal, speakers at Morningstar's conference last week agreed, according to a report by MarketWatch. Lower fees, more active boards and attention to lowering transaction costs are just three of the recent trends benefiting investors, they said.
"Investors are increasingly seeing the long-term impact of fees," said Don Philips, managing director of Morningstar. "Fund fees coming down is proof that the system works, as investors and financial advisers are getting smarter and voting with their dollars."
In addition, Philips said, fund boards are also paying closer attention to fees as well as transaction costs. They "aren't behaving like lap dogs anymore. Boards are asking managers to justify fees and are getting back to what they're designed to do."
It is no wonder, then, that fund flows have been strong over the past few years, added Russel Kinnel, director of fund research at Morningstar.
Speakers also said it was smart of regulars to require managers to disclose how much they have invested in the funds they run, but they noted that regulators allow funds to disclose these sums in round increments, say between $1 and $10,000. It would be more useful information if it were in exact dollar amounts, they said.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.