NPR Interview with David Swensen

“I spent my career at Yale trying to be a good fiduciary for the university and then to look at the for-profit mutual fund industry and see a total lack of fiduciary responsibility to the individual investors was very upsetting to me … the mutual fund industry has done a terrible job, but then individuals take this lousy set of choices and then they make bad decisions on top of that. The most frequent bad decision is that they buy something after it has gone up and sell something after it has gone down.”

Ain’t that the truth.

Excerpt from another interview:

“The for-profit mutual fund industry essentially fails investors. They’ve done very well at generating profits for themselves, but they’ve done a terrible job of providing good returns to the investor.”

And one more:

“Swensen’s critique of the for-profit mutual fund industry is devastating. He argues persuasively that most mutual funds and their managers benefit from high fees, sales commissions, portfolio turnover, and, above all, amassing more assets. Those actions all run counter to the interests of individual investors. Moreover, most funds fail even to achieve their basic goal of beating market returns. They are charging a lot of money for lousy results. ‘Overwhelming evidence,’ writes Swensen, ‘proves the failure of the for-profit mutual-fund industry.’”

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