Mutual fund boards are winning the respect of Morningstar by taking independent steps to represent the interests of their shareholders. The board of the WWW Internet Fund drew high praise from Morningstar analyst Russel Kinnel by taking steps to merge or disband sub-par investments.

In a report published on Morningstar’s Web site, Kinnel noted that mutual fund boards rarely take a stand to help shareholders without prompting from regulators or powerful shareholders. What the board at WWW Internet Fund has done is remarkable, Kinnel said, because the trustees have acknowledged the fund’s obviously poor management and started a dialogue to alleviate the problem.

Kinnel also sings praises for the board of the Oakmark Small Cap Fund, which trailed the performance of peer funds in subsequent back-to-back quarters. Rather than merging the fund’s assets into another portfolio or continuing to plug away, the board voted to liquidate this investment, regardless of the fact that it was Oakmark’s only small-cap fund.

In an effort to help motivate further upstanding board conduct, Kinnel has compiled a list of conscionable board decisions that is available on Morningstar’s Web site www.morningstar.com.

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