Why I Manage My Own Mutual Funds (And Why You Might Not Want To)
Not many people know this about me but I’ve always found investing incredibly interesting. I never had the time to dedicate to managing individual stocks; however, I have researched and selected all of the funds that I have invested in for many years, and I have been quite successful.
My interest in the financial world, mainly investing, stems from the early part of my career, where I had the opportunity to support portfolio accounting (Portia) and trade systems (MFTP & Bloomberg) at firms like Evergreen Investments (part of First Union, then Wachovia Bank) and Montgomery Securities (under Bank of America before it was closed down). Seeing how quickly money moved was absolutely fascinating.
That said, this article isn’t a pitch for DIY investing. I’m not a certified financial advisor or wealth manager. I still recommend working with a trusted professional — especially if you’re just starting out. But with the rise of advanced robo-trading and AI-supported research, I wanted to share how I personally approach fund selection and how I leverage AI to support my activities.
The Ground Rules: Know Thyself
Before picking a single fund, it’s critical to know your goals and your risk profile — and understand that both will evolve over time. Portfolio diversification isn’t just about spreading your money around; it’s about aligning that spread with your life stage, time horizon, and emotional tolerance for volatility.
If you’re not experienced in this space, sit down with a financial advisor who listens — not just sells. It’s worth it.
My Toolbox
I’ve relied on Morningstar (example quote: FPURX) since the early 2000s. Its wealth of data — performance metrics, ratings, risk profiles, fund manager bios, etc. I have also used many of the tools offered by Fidelity (example quote: FPURX).
Other Useful Sites & Tools:
- FNRA Fund Analyzer
- Social Security Estimator
- Seeking Alpha Market News
- Charles Schwab Fund Research
- Yahoo Finance News
Why I Skip Target Funds
When it comes to selection, I have chosen to pick my own funds as opposed to target allocation based products. Target-date funds are a great hands-off option, but I prefer building my own diversified portfolio because I enjoy the process — and I’ve gotten pretty good at it.
I will say, to be effective in managing your own portfolio of funds, it does require a good amount of research, and you still need to pay attention to what is going on. One of the biggest differences that I have found, between managing a portfolio of funds and managing individual stock — is what you are paying attention to (professional advisors, feel free to weigh in). With individual corporate stock trading, you are paying attention to many things, but a lot of it is focused on company news and the market, whereas with funds, I find that I am focusing more on fund managers and the concentration/makeup of the funds.
Here’s a simplified version of how I evaluate funds:
⚠️ I am providing this simply for educational purposes — I am not a professional advisor — please seek guidance from a professional financial advisor for making any decisions regarding your finances.
My Evaluation Checklist
- Morningstar Rating: Start with 5-star or strong 4-star candidates.
- Asset Allocation Fit: Does this fund fill a gap in my portfolio?
- Performance (Growth & Returns): How does it compare to its category and benchmarks?
- Risk vs Return: Are returns justified by the risk profile? Is it consistent with peer funds?
- Expense Ratio: Is the cost reasonable given performance and fund type?
- Company Reputation: Is the fund house reputable and transparent?
- Management Team: Who’s steering the ship? What’s their track record and stability? How do they invest?
- Sector & Holdings Exposure: Is there overlap with other funds I own? Are exposures intentional or redundant?
- ESG & Sustainability: I do look at ESG ratings. It’s not my top filter, but it does matter — especially if a fund holds companies I personally avoid.
I repeat this process until my portfolio feels balanced — though not necessarily “complete.” For me, “diversified” doesn’t mean “check every box,” but rather, be intentional in every box I do check.
My Current Strategy
My allocations have shifted over time, but here’s where things stand today:
- ~75% Equity / ~20% Fixed Income / ~5% Other
Equity categories include:
- Retail focused fund
- Large value & Large blend
- Undervalued focus
- Small & Mid-cap Index
- International Large blend
My strategy leans toward value over growth, and I’ll pay higher fees for funds with smart, consistent management — especially in niche or high-yield areas. For stable sectors or broader indices, I aim for lower-cost options like ETFs.
Final Thoughts
Mutual funds offer a convenient entry point into investing. They’re diversified by design and professionally managed — but that doesn’t mean they’re simple. Fund selection still requires diligence, and the biggest risk isn’t always the market; it’s choosing something that doesn’t align with your goals.
While tools like AI make research faster (using ChatGPT to search for disruptions that might impact certain funds) and platforms like Morningstar put powerful analytics in your hands, they don’t replace the human element. That’s why, even though I enjoy managing my own portfolio, I still believe the best move for most people is to find a trusted advisor.
But, if you are trying to get started on your own, or simply wanted to know a little bit about what goes into selecting funds, hopefully this high level overview was helpful.
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