When Process Trumps People
Medalist funds with low People scores but high marks for Process.
Warren Buffett is often quoted as saying, "I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will."
With a little massaging that stock-picking maxim can apply, at least in part, to selecting mutual funds. Investing success depends a great deal on the intelligence, temperament, and judgment of the people doing the investing; few, if any, approaches are completely simpleton-proof. Still, buying a fund with a disciplined, enduring investment process that can be repeated by successive generations of managers or investment teams can insulate shareholders from the risk of the next manager of their fund turning out to be a dunderhead.
Dan Culloton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.