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Fund Spy

Great Lone Ranger Funds

The good one-fund shops focus on making their clients' money grow alongside their own.

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This article originally appeared in Kiplingers.

There's something special about single-fund shops--the good ones, anyway. I have to qualify that because you can find some of the craziest managers running one-fund outfits, hoping to fool enough people into handing over their money to a guy with a wacky investment strategy who runs the whole kit and caboodle from his garage. (Hint: If he says he derives his strategy from studying the behavior of bees, as one fund manager actually did, run away.) The good one-fund shops want to manage money, not people. They can focus on making their clients' money grow alongside their own. They're not interested in building an empire.

Fully focused. With but one fund to tend, the manager has no distractions, no need to hit a blowout number to maximize a bonus, and no conflict of interest that would lead him or her to sell out shareholders to a market-timer, a marketing whiz, or another individual with an agenda not aligned with the customer's.

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Russel Kinnel has a position in the following securities mentioned above: JENSX. Find out about Morningstar’s editorial policies.