Step Up Your Fund Manager Scrutiny

Mutual fund trustees also have faced closer scrutiny in recent years. Warren Buffett once derided them as "lap dogs" who were paid big bucks for attending meetings but who were not working on shareholders' behalf to reduce fees and costs. Now, trustees are in the spotlight, as not only their pay but their investment in the funds, and the contract renewal process for the advisory agreement with the funds, must all be disclosed.

Stewardship Scrutiny

Morningstar reviews more than 1,200 mutual funds each year, and the focus is on more than just manager incentives.

The Stewardship grades, which range from A to F, are based on issues such as the level of fees compared with those of funds of like size and kind; the absence of regulatory issues; the "corporate culture" of the fund family and whether it encourages talent retention; and on the caliber of the board of trustees, as measured by factors such as independence, fund investments and how many funds each trustee oversees.

Phillips says that the ratings, which frequently include meetings with trustees, generate "a lot of discussion" -- and result in giving investors a voice and an impact, other than just selling their fund shares.

If you find your fund has a failing grade, it's time to examine why you're holding an investment that isn't doing its best for you.