Capital Migrates To Best Fund Families In September 2020 MFO Ratings Update

All fund risk and return metrics, ratings, and analytics were uploaded to MFO Premium on this past Sunday, 4 October, reflecting performance through September 2020 or 3rd Quarter.


The MFO Fund Family Scorecard reveals 31 families (like Winning Points, Huber, Saratoga) where every fund has underperformed since launch by an average of -3.2% per year. Combined they represent $15B in assets under management (AUM), carrying an annual expense of $173M per year nominally for the privilege of owning them. Can you believe that?


Fortunately, most assets gravitate to best performing families. Let’s break the families down by AUM: first, the largest families with greater than $1T; second, next tier with AUM greater than $500B, and finally those greater than $100B.


Four families have more than $1T: Vanguard, largest by far, Fidelity, BlackRock, and American Funds. Three place in the “Top” or “Upper” quintiles of the MFO Scorecard, meaning most of their funds have outperformed against their peers since launch. BlackRock, which includes iShares ETFs, rates a “Middle” grade.



The next tier also has four families: State Street, T Rowe Price, JP Morgan, and Invesco. Again, three of four receive an “Upper” rating in Scorecard.



There are 34 families with assets over $100B (but less than $500B). Once again, we see most of the assets migrating to best performing families, including Charles Schwab and PIMCO.



Finally, summarizing AUM from all 395 fund families (each with 3 funds or more), we see the same pattern: assets clearly migrate to best performers.



One could argue that the top-rated families with lower AUM, like Mairs & Power, Osterweis, Grandeur Peak, or even Charles Schwab, are likely underappreciated by the market, due to availability, distribution, style, or knowledge. In any case, this tool is usually the first one I review each month.


As always, if you see anything amiss or have suggestions for improvement, let us know and we will respond soonest.


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