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Fund Spy

Does Your Fund Company Put You First?

Morningstar's Stewardship Grades rate firms' corporate cultures.

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Everyone wants to be treated like a star. Okay, red carpets and paparazzi are overkill for most, but we all want to feel as though our life savings mean just as much to a fund company as the millionaire's next door.

How well your money is treated by mutual funds depends primarily on the fund shop's corporate culture, and Morningstar analysts evaluate firms' corporate cultures through the Stewardship Grades for mutual funds. As part of our analysis, we draw on years of conversations with fund managers and executives, as well as fund-company visits. We also read SEC disclosures and comb through data to determine whether fundholders come first at a particular shop. Funds that consistently act in shareholders' best interests earn top marks for corporate culture.

We've also found that a firm's corporate culture sets the tone for other areas of stewardship, namely fund-board independence, manager incentives, fees, and regulatory history. Funds that earn A's for corporate culture from our analysts also tend to score well in those other four areas of the Stewardship Grade. In fact, of the 214 funds that earn A's for corporate culture, only two have overall grades lower than a B.

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Laura Pavlenko Lutton does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.