The supervisor of a pool of investment capital such as that held by a mutual fund, pension fund, or closed-end investment company. The fund manager is charged with making investment decisions that adhere to stated investment objectives.
I choose a particular mutual fund both because I am impressed with its performance or potential and because it strengthens the diversity of my portfolio. Should I also add an assessment of the fund's manager to this equation? If so, what should I consider?
With some 8,000 (and climbing) mutual funds to choose from, it has become a daunting task for individual investors to figure out which is the right one for them. Check out the fees. Read the prospectus. Gather short- and long-term performance data. Compare a fund's historic rate of return against those of its peers—mutual funds that invest in a similar asset class. And, yes, check out the fund manager. As every mutual fund prospectus tells us, past performance is no guarantee of future results. But at least you should know whether those total return figures were achieved by the current money manager or by someone who has moved on. What's more, experience matters in the world of money management, and investors should do a little digging to find out if a fund manager has weathered a bear market as well as a bull market.
Christopher Farrell, Economics Editor, Minnesota Public Radio, heard nationally on Sound Money®
