Why should mutual fund managers and other institutional investors bother to intimately direct corporate management of the companies they invest in, when they are not adept managers of business. That function is a far cry from their primary job of selecting securities. In that job, they have little time or the ability to attempt to get too close to be involved.
I know that the job of an investment manager is to pick good corporate management. But that can be superficial at best. To get into the trenches to truly evaluate what is good or what is bad management takes lots of on-the-site inspection and knowledge with which fund managers are not equipped. They may say they have that ability, but that would be a facade.
Despite this, there is a constant clamor from groups, usually those with little business acumen, who insist, that institutional investors, including mutual fund managers, micro manage each and every investment they make. That is an impossibility.
It is yet another reason I suggest investment in funds that track indexes. (See the Earl J Weinreb NewsHole® comments.)
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