A study of 1,300 mutual funds based in the U.S. by the Georgia Institute of Technology and the London Business School found that funds in which the managers of the fund also invested in it appreciated an average of 8.7% in 2005, the year covered in the study, versus 6.2% appreciation for those funds where the managers had no money in their fund, which included more than half of all mutual funds in the study. It also found that fund performance increased .03% for every .01% increase in manager ownership, and that manager investments were highest for domestic stock funds and lowest for international bond funds, although this may just reflect the fact that interest rates were rising in 2005, which is usually not good for bond funds, since the price of bonds declines when interest rates rise. http://all-about-mutual-funds.blogspot.com/2008/01/mutual-fund-managers-investing-in-their.html   read more »