Research Library
Partnering With Passive Fund Sponsors That Have Your Back
By Adam McCullough | 18 October 2017
Successful investing hinges on putting yourself in the best position to maximize favorable outcomes. Beyond selecting a fund that tracks a well-constructed index and charges a low fee, choosing a fund sponsor that aligns its interests with its fundholders’ increases the odds of a positive investor outcome. Our research found that purveyors of passive funds that align their incentives with those of their fundholders have generated better category-relative risk-adjusted performance on average than funds from firms that seem to prioritize their own interests over investors’. Investors in passively managed funds are best served by firms that offer inexpensive products that efficiently track their underlying indexes and have long-term investment merit.
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