Investing in funds: is the manager on board?

There are many conflicts of interest in the financial industry that investors need to watch out for. But one of the most persistent and insidious is in how fund managers get paid. Most managers get the bulk of their pay based on how much money they manage (their assets under management, or AUM). The problem is that “gathering” assets – ie, getting as many people as possible to buy your fund – involves different skills and priorities from investing for the best returns. There is, of course, an overlap – a strong track record will help persuade people [...]