Yale Investment Manager Criticizes Mutual Funds

Personal finance columnist Susan Morris reports on the investment views of David Swenson, chief investment officer of Yale University's endowment fund, and author of a new book, "Unconventional Success: A Fundamental Approach to Personal Investment." in this article from The Tribune-Review. Noting that Swenson has achieved net investment average annual returns of 16.1 percent, Morris says, "Swenson slams the mutual fund industry for not protecting the interests of the investor. He uses as an example the high turnover rate of many mutual fund portfolios. Even though a significant portion of assets in mutual funds is taxable, Swenson contends that the majority of funds are managed with complete indifference to the tax consequences." In addition, she reports that he also eschews high management fees, particularly 12(b) fees, and favors index funds, particularly "those run by nonprofit companies, such as Vanguard."

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(May '04-Jun '05)