I wrote a post on my blog last week mentioning the highlights of the study below. I thought the entire study and data might be more useful for Spoke Fund® guys to see.
The study backs up the informal point I’ve made in prior posts here: that, all things being equal, ownership in your fund means better long-term performance. Here’s part of the conclusion (emphasis mine):
Regression analyses reveal that higher managerial ownership is positively associated with mutual fund returns and negatively related to fund turnover. Both findings are consistent with the reduction of the agency costs set forth in the Dow and Gorton (1997) model, where managers make value-reducing trades in lieu of making no trades when they cannot identify any suitable investments.
Investors should consider many variables when they choose to invest in mutual fund shares. The optimal fund choice for each individual depends on his goals, investment horizon, and risk profile. However, the results of this study suggest that investors of any tax status may need to add managerial ownership to the list of variables to consider when choosing a mutual fund investment.
Here’s the study itself: