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Rekenthaler Report

What Makes a Fund Company Excellent?

The critical item is the hardest to measure.

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I began my Morningstar career by laying bricks: Study a fund's performance record and portfolio holdings, interview its manager, compose an analysis. Fund by fund, month by month, year by year. My knowledge came one brick at a time, lacking a blueprint, unaware even of what I was constructing.

That wasn't the fastest path toward recognizing that funds are best understood as outputs of an institution rather than as stand-alone entities, but I eventually got there. Slowly, patterns emerged. Each of this company's stock funds trades frequently. This firm hires from the outside. That one promotes from within. This organization is quick to liquidate its losing funds. With repetition, the individual clues become evidence.

John Rekenthaler does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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