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Mutual-fund executives owe their livelihoods to shareholders, but most treat investors like ordinary customers rather than partners or bosses.

That’s why we get to this time of year and I feel a need to ask fund honchos to give shareholders some meaningful gifts for the holidays.

The changes that fund firms could make to help shareholders are endless, but I’m not greedy; every year or two, I create a wish list and would gladly settle for just a few upgrades at a time.

Fund companies should fulfill shareholder wishes not because ’tis the season for it, but because it’s the right thing to do. Regulators know it; in the past, the things I have requested have become reality mostly when some wrongdoing came to light that required a slap on the wrist to the industry.

These “reforms” have mostly been about injecting some common sense into the fund-ownership process.

With that in mind, all I want from fund companies for the 2013 holidays is:

A clear expectation of what management believes the fund should achieve.

Funds provide investment objective, but that’s a vague statement, more about methods than expectations. Rules prohibit funds from making projections.

But managers and fund directors know the background, and they create targets that aren’t shared with the outside world; they understand that they created a fund because they felt they could achieve, say, “above-average results over time horizons of five years and longer.”

Fund boards use those kinds of expectations to decide if a manager is doing the job well enough to be rehired, but they also give those managers a lot of slack; shareholders, however, should be able to see whether the fund is achieving its internal goals. It would let them create clear expectations and measure whether a fund is meeting them.

Funds that deserve to stay open.

Many times, a fund’s biggest asset to the sponsor is that marketers can sell it, rather than that it can deliver superior performance. In those cases, it’s not in the shareholder’s best interests to keep things going.

Unfortunately, because mediocre funds create something of an annuity for the management company — regularly delivering fees from investors who are inert or simply oblivious to inferior, uninspired results — the fund world is not a meritocracy. Sponsors often keep lousy funds operating for decades.

If a fund doesn’t deserve to keep going — if performance is undistinguished and second-rate — kill it off. Merge or liquidate it, but encourage shareholders to find worthwhile investments rather than subjecting them to second-rate, uninspired issues.

A quick summary of prospectus changes.

The Internal Revenue Service does a better job of highlighting changes to tax codes and filing instructions than funds do of notifying shareholders whenever there are changes in the prospectus or operating rules.

A simple, highlighted summary of what is new and different this year immediately alerts investors to changes; even if all they do is skim the documents, it enhances their understanding of the fund, and reduces the potential for surprises.

An indication of whether siblings play nicely together.

Buy two or more funds with similar investment styles and significant overlap in holdings and you may not get the diversification you want.

Fund bosses know which funds within their family are substantially similar; investors should be told. A simple statement showing which members of the family have, say, 20 percent overlap would do; disclose that buying a fund if you already own certain sister funds creates the risk of concentrating a portfolio, rather than diversifying it.

Comparative fee information.

Above-average expenses are never a good sign, because they cost you no matter what is happening in the market. Yet when funds disclose their expense ratio, they don’t show how those costs shape up against the competition.

If funds can compare performance to an index or average — as required in the prospectus — then their sales documents could compare expenses with the average fund in the peer group, too, by simply adding columns so that the fund’s costs are shown next to averages for actively and passively managed funds in the same category or peer group.

Manager records, relative to the fund’s benchmarks.

As long as we are improving comparative data, funds should disclose each manager’s career track record relative to the peer groups and benchmarks they have competed with.

That way, shareholders cannot only see clearly if a new manager has been good or bad since they replaced the old skipper, but also get a clear view of a manager’s evolving career history.

It would give investors a better idea of the manager’s abilities, by not allowing the manager to bury their lousy record at some previous issue or to hide some stinker that they ran into the ground.

Fund companies have these numbers: They use them to judge managers and decide which ones deserve to keep their jobs (or are qualified in the first place). If shareholders had this information, we could decide for ourselves.

Directors who get paid in fund shares, with disclosures about the funds they selected for their compensation.

Shareholders want independent directors’ interests to be aligned with their own.

Paying directors with shares does this, while preventing directors from having no stake at all in the fund families they oversee, an all-too-common reality only revealed by reading deep into fund disclosures.

This disclosure also would tell investors which funds directors are most comfortable with, information so valuable that it might get shareholders — or their financial advisers — to dig deeply into fund disclosures.

Chuck Jaffe is senior columnist for MarketWatch. He can be reached at or at P.O. Box 70, Cohasset, MA 02025-0070.

Copyright 2013, MarketWatch