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Fund Spy: Morningstar Medalist Edition

Yacktman Focused's Markup Is Needless

A higher-than-necessary expense ratio holds this Silver-rated fund back.

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Similar funds from the same manager often receive the same Morningstar Analyst Rating. But that's not written in stone. Some readers may be surprised to see that two similar funds from the same management team can receive different ratings. That's the case with Silver-rated  Yacktman Focused (YAFFX) and Gold-rated  Yacktman (YACKX), in which the former's unnecessarily high expenses dim its appeal relative to its cheaper sibling.

It's difficult to see why Focused's 1.26% expense ratio is half a percentage point higher than sibling Yacktman's. The older Yacktman fund's asset base is about $1.3 billion greater than Focused's $9.3 billion, but that difference is immaterial given the economies of scale in asset management. In fact, of the 13 actively managed no-load large-blend funds with more than $5 billion in assets, none has a higher expense ratio than this one.

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

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