It's natural for investors in a mutual fund to want to know how much the fund's management has invested in it. After all, they should have some of their own money in the fund if they expect you to pour in your hard-earned cash. Surprisingly, the mutual fund industry sees the disclosure of management ownership as superfluous. That's why you won't find the information in the prospectus distributed to investors. This and other disclosures have been shunted to the Statement of Additional Information (SAI)—presumably to save space for glossy photos and full-page pie charts.
You have to request the SAI from your fund company, but inside you'll find at least partial answers. The percentage of management ownership will be listed, but usually, no names will be assigned to specific amounts. The exception would be if a manager owned a 5% stake, in which case he or she would be required to disclose that information. Unfortunately, mutual funds are so large that a 5% stake requires hundreds of millions of dollars, so it's rare for a fund manager to qualify.
How to Interpret the Manager's Holdings
If you are able to estimate the fund manager's investment in the fund, you will have to come to your own conclusions. It may be a sign of self-confidence for a manager to invest in a fund they manage. People rarely invest in vehicles that they don't think will make money. On the other hand, it could mean the manager is overconfident.
How can you tell the difference? Look at how long the manager has been invested in the fund and its performance over that period. A new manager who just invested last year is not sign of self-confidence, but could just be an indicator of wishful thinking. But a manager who has been invested for years while the fund did well could signify you have a manager whose confidence is justified.
While you have the SAI, you can also look up handy information like the fund's history (was it ever a fund with a different name?), how performance data is calculated, and who controls the votes for voting securities.
The Bottom Line
The question that follows once you figure out how much the management owns is: "what does it mean?" This is a personal question, but most people would agree that it's a good sign for the fund manager to have a stake in the fund, thus providing an extra incentive to create shareholder value. (See also: Digging Deeper: The Mutual Fund Prospectus.)
This question was answered by Andrew Beattie.