Pay Attn If U have any money investedWith most funds, managers have none of their own funds at stake

[EV_Ares]

BOSTON (MarketWatch) -- In times like these, investors would like to take some comfort that they are investing like the pros. Indeed, it's comforting to know that the people running your mutual fund have their money -- and their family's cash -- mixed into the same pool as yours.
Alas, all too often it's not and the fund managers don't have enough belief in what they are doing to actually live by it.

That's the conclusion to be drawn from a new Morningstar Inc. study which looks at how much managers invest in their own funds. The data has been available for a few years now, stuffed into fund documents that no ordinary shareholder reads -- part of a Securities & Exchange Commission reform that was supposed to make funds more transparent.
All named managers for a fund must make the disclosure, putting their investment into groupings that run for $0 to over $1 million. Morningstar examined the ownership status for all of the Morningstar 500 funds; when accounting for additional share classes -- where a fund can trade under multiple ticker symbols, and sometimes with different managers, to reflect a different cost structure -- the study looked at about 6,000 issues.

In 46% of the domestic stock funds surveyed, the manager hadn't invested a dime. Other asset classes were far worse with nearly 60% of foreign stock funds reporting no manager ownership, two-thirds of taxable bond funds having no managers with money in the fund, up to 70% of balanced funds having no manager cash and some 78% of muni bond funds having shareholder cash only.
Ouch. That's a lot of managers who are going out to eat, rather than eating their own cooking.

rest of the article @ the link: http://www.marketwatch.com/news/story/most-funds-managers-have-none/story.aspx?guid=%7B907D8FC0%2DA948%2D415A%2D8133%2DF57A365CC367%7D

[flvegan]

1. Were I a fund manager, I wouldn't invest in it.

God forbid I sell right before a dip in value. I'd have folks screaming "insider trading" straight away. I'd certainly invest in other funds in my house's family, but probably not mine. Not worth the potential headache.

[EV_Ares]

2. Good point; I am not sure how they are required to invest but I do know from my investments and my

wife who is with another large firm, you really have to pay attention (as you should) because they do push or attempt to push off some that evidently they get a higher percentage or whatever. I don't know but the article seems to point out like they should at least have some stake in what they are selling you. However, I agree with what you said, if they did have a big stake in say a fund you bought, then they happened to sell, just because it had hit where they planned on selling and you ended up losing money for some reason, that would not look good as well.

Probably a dilemma for them.