Skip to Content
Fund Spy

American Funds, Dodge & Cox Managers Stick It Out

Firms have high manager retention rates, says Morningstar study.

Mentioned: , , , ,

When Morningstar's analysts study a fund company's corporate culture, we always look at the fund managers' tenure. If the managers have spent their careers at the firm, there are usually good reasons why: The managers have the support they need to execute their investment strategy, they're paid relatively well, and they've generated decent returns.

On the flip side, manager departures are often a leading indicator of trouble with a firm's corporate culture. Fund companies often have reasonable explanations for managers' departures, but in our experience, managers don't leave if the pasture they're in seems relatively green.

To keep track of who is coming and going from a fund shop, we have calculated a manager-retention rate for fund firms. This rate measures what percentage of a firm's fund skippers stick around from year to year. To determine the retention rate, we see who was listed as a fund manager at the beginning of the year, and then we see if they were still around at the end of the year. We divide the number of departures by the total and come up with a retention rate.

To view this article, become a Morningstar Basic member.

Register for Free

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