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.
It is unrealistic to expect shareholders to "elect" trustees for their mutual funds. First, investors do not own ALL funds at a shop, so they shouldn't be allowed to select trustees that oversee all funds at shops with multiple funds. It is an idea that can be explored at boutique shops with ONE fund.
Even at boutique shops with one fund, how does one elect trustee at inception?. Even otherwise after a few years, it would need a sufficient number of investors in the fund to make this meaningful. Then again why would someone who has $1M invested in a fund care about what someone with $1000 invested thinks about who is the trustee. And do we want our trustees to be politicians and campaign for election.
The problem is so many articles are written to sensationalize a concern but do little to offer real solutions. I know the world sucks, but what can I do about it? I do my research and FWIW land upon a fund I want to invest in. One fund sucks and trustees don't get paid anything. Another does well and pays trustees $100K each. Which fund do you think I'm investing in?
Berkowitz owns $150M (I believe this is correct) of FAIRX shares. The largest shareholder. He is the chairman of the board of trustees at Fairholme. Anyone else deserves to be? Shareholders should elect someone else? Why?
If someone is genuinely concerned about the problem then offer a solution. Telling me my fund company is doling out earnings made on collective assets of mine and other investors only gives me an ulcer. It does not give me any options. If WSJ really cares about investors, then be bold and suggest a regulation - a good one for a change - such as "A trustee receiving compensation to be on the board of a Mutual Fund needs to receive 50% of that compensation in fund shares in an IRA". OR "Trustee needs to have $100K invested in the fund". Maybe that will attract the right kind of "trustees".
This is about helping the investor. Otherwise an article like this is not even news. Yesterday I learnt my plumber overcharged me and that ticked me off. This article just ticked me off again.
Comments
Even at boutique shops with one fund, how does one elect trustee at inception?. Even otherwise after a few years, it would need a sufficient number of investors in the fund to make this meaningful. Then again why would someone who has $1M invested in a fund care about what someone with $1000 invested thinks about who is the trustee. And do we want our trustees to be politicians and campaign for election.
The problem is so many articles are written to sensationalize a concern but do little to offer real solutions. I know the world sucks, but what can I do about it? I do my research and FWIW land upon a fund I want to invest in. One fund sucks and trustees don't get paid anything. Another does well and pays trustees $100K each. Which fund do you think I'm investing in?
Berkowitz owns $150M (I believe this is correct) of FAIRX shares. The largest shareholder. He is the chairman of the board of trustees at Fairholme. Anyone else deserves to be? Shareholders should elect someone else? Why?
If someone is genuinely concerned about the problem then offer a solution. Telling me my fund company is doling out earnings made on collective assets of mine and other investors only gives me an ulcer. It does not give me any options. If WSJ really cares about investors, then be bold and suggest a regulation - a good one for a change - such as "A trustee receiving compensation to be on the board of a Mutual Fund needs to receive 50% of that compensation in fund shares in an IRA". OR "Trustee needs to have $100K invested in the fund". Maybe that will attract the right kind of "trustees".
This is about helping the investor. Otherwise an article like this is not even news. Yesterday I learnt my plumber overcharged me and that ticked me off. This article just ticked me off again.
Not sure what the purpose of this story is.
We know this article at best was written to fill a quota, or because there was a 6' x 3' space on page 2 of the WSJ. We cannot control that.
So what is it that we can control on MFO? :o