Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Good debate that is being brought to public attention.
That said, my reservations remain about Mr. Winter's own shop, which charges 1.85% ER on $1.7 billion Assets Under Management.
"Picking the pockets" of Wintergreen shareholders.
Also, the latest SAI shows two directors without a lot of skin in the game, yet they are compensated $40K annually:
To Mr. Winter's credit, he's in at over $1M:
He does not publish an absolute amount however.
Also, I've started wondering whether PMs pay the same ER as other shareholders with their own invested amounts in the fund. WGRIX, the institutional version of WGRNX, charges 1.63% ER.
Anybody know the answer to this?
Anxious to see also how Wintergreen responses to the recent queries from heezsafe and rjb112.
"Picking the pockets" of Wintergreen shareholders.
Not entirely fair because mutual funds are very different from corporations since the investors are BOTH customers and shareholders. And so are conflicted.
For fund owners and families, investors are really customers with a pricing model that market can bear (unless you are a not-for-profit). For investors, they are shareholders where the product should be sold as close to zero as possible.
This is the schizophrenic nature of mutual funds and why the directors have such a tough time negotiating fees with management even if there was no cronyism. Maximizing shareholder benefit is equivalent to pricing the product as close to zero as possible which gives no incentive to management. What the compromise should be cannot be set arbitrarily but should be decided by the market forces. Corporate boards do not dictate product pricing to management.
So, think of the investor fight against the fund as customers complaining about high prices or price gouging rather than shareholder treatment. The options are to walk away from the fund if the price is high as consumers do for products.
Anxious to see also how Wintergreen responses to the recent queries from heezsafe and rjb112.
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Charles: I'd like to see the "skin in the game" numbers reported as a percentage of financial assets, or percentage of total investments, or percentage of net worth, rather than just find out that a manager has over $1M invested in his fund.
What if a manager has $200M in financial assets, with only $1M in his fund? When I read a Morningstar analyst report and they praise a portfolio manager for having $1M in his own fund, I'm not impressed. What percent of his life savings is that?
When I purchased some Berkshire Hathaway B shares many years ago, I was influenced by the fact that almost all of Warren Buffett's net worth is in the stock. So the financial fate of my investment would move up or down exactly as Buffett's net worth moved, proportionally of course.
I like the fact that the employees of Longleaf Partners are not allowed to have outside investments. They can only invest in the Longleaf Partners Funds. I would like to see all mutual fund companies adopt similar rules. If you can't put all your financial assets in your mutual fund, perhaps you shouldn't be running a mutual fund.......
I like the fact that Bruce Berkowitz is 'all in' with his 300M or 400M or whatever it is. He's setting the standard that all should follow.
Regarding the recent query to Wintergreen: I sent off email number two on May 14th asking my point of contact if he had received the first email. Still waiting.
Comments
That said, my reservations remain about Mr. Winter's own shop, which charges 1.85% ER on $1.7 billion Assets Under Management.
"Picking the pockets" of Wintergreen shareholders.
Also, the latest SAI shows two directors without a lot of skin in the game, yet they are compensated $40K annually:
To Mr. Winter's credit, he's in at over $1M:
He does not publish an absolute amount however.
Also, I've started wondering whether PMs pay the same ER as other shareholders with their own invested amounts in the fund. WGRIX, the institutional version of WGRNX, charges 1.63% ER.
Anybody know the answer to this?
Anxious to see also how Wintergreen responses to the recent queries from heezsafe and rjb112.
For fund owners and families, investors are really customers with a pricing model that market can bear (unless you are a not-for-profit). For investors, they are shareholders where the product should be sold as close to zero as possible.
This is the schizophrenic nature of mutual funds and why the directors have such a tough time negotiating fees with management even if there was no cronyism. Maximizing shareholder benefit is equivalent to pricing the product as close to zero as possible which gives no incentive to management. What the compromise should be cannot be set arbitrarily but should be decided by the market forces. Corporate boards do not dictate product pricing to management.
So, think of the investor fight against the fund as customers complaining about high prices or price gouging rather than shareholder treatment. The options are to walk away from the fund if the price is high as consumers do for products.
Charles: I'd like to see the "skin in the game" numbers reported as a percentage of financial assets, or percentage of total investments, or percentage of net worth, rather than just find out that a manager has over $1M invested in his fund.
What if a manager has $200M in financial assets, with only $1M in his fund?
When I read a Morningstar analyst report and they praise a portfolio manager for having $1M in his own fund, I'm not impressed. What percent of his life savings is that?
When I purchased some Berkshire Hathaway B shares many years ago, I was influenced by the fact that almost all of Warren Buffett's net worth is in the stock. So the financial fate of my investment would move up or down exactly as Buffett's net worth moved, proportionally of course.
I like the fact that the employees of Longleaf Partners are not allowed to have outside investments. They can only invest in the Longleaf Partners Funds. I would like to see all mutual fund companies adopt similar rules. If you can't put all your financial assets in your mutual fund, perhaps you shouldn't be running a mutual fund.......
I like the fact that Bruce Berkowitz is 'all in' with his 300M or 400M or whatever it is. He's setting the standard that all should follow.
Regarding the recent query to Wintergreen: I sent off email number two on May 14th asking my point of contact if he had received the first email. Still waiting.
Just 20 minutes ago I received a reply from my contact person:
"Mr. Winters is currently traveling, but I will present this letter to him as soon as is practical."
He said that some emails I sent to him were blocked as spam, but that he has corrected that situation.
rjb112