How We Pick Funds

How We Pick Funds
People often ask us how we pick mutual funds for their managed portfolios. So I would like to share our process with you and tell you about a new fund which we have already added to most clients' portfolios.

We believe that some managers show unusual abilities to pick investments and manage their portfolios to better than average returns during most years. So we look for proven investment managers who have outstanding track records. Since we can choose from thousands of funds and managers, we do not know any reason to use less than people who have been proven to be exceptional managers.

We also have noticed that some funds and managers get too much money to manage adeptly. Their funds become too large to quickly make needed changes. They often have so many billions of dollars in their funds that they must use hundreds of stocks in their fund. So we look at fund size and prefer great managers who have new small funds. Also, we are concerned that a fund manager has adequate support staff and resources to research and manage the type of investment portfolio. For instance it takes a larger team to manage foreign stocks than only US stocks.