Dear Dagen: Clarity Equals Trust in Shareholder Notes

A mutual fund report that's well-written and honest can't make you forget a double-digit loss. But it certainly can make you a better, more loyal investor.

A column last week covered weak excuses fund managers have used in their shareholder letters to explain away terrible returns. Some of their explanations are so lame, they might as well have said, "The dog ate my returns."

But other fund companies know exactly how they should communicate with their shareholders. These companies use simple, straightforward language to explain both good and bad performance. They give details on how a manager is picking stocks. And they deftly manage your expectations about future returns. ...