Morningstar is out with a new report on the global mutual funds industry, and the only country to score an "A" is the U.S. That's flattering, I suppose. But it can mean only one thing: we're grading on a curve.

The report—which is a great piece of research, and is available here—examines the mutual fund investor experience in 16 countries. It analyzes that experience on a variety of metrics: Investor Protection; Transparency in Prospectus and Shareholder Reports; Transparency in Sales Practices and Media; Fees and Expenses; Taxation and Distribution/Choice.

The U.S., as mentioned, is the only country to earn an "A." China gets a "B+" while Italy, Japan, The Netherlands and Taiwan rank "B's." The numbers go on from there with New Zealand bringing up the rear, earning a big D-.

I don't have the global experience to compare the U.S. and New Zealand, but I know one thing: we don't deserve an "A."

• How do we deserve an "A" when the majority of mutual funds are sold on commission, putting the interests of financial agents at odds with the interests of investors?
• How do we deserve an "A" if 70-85% of our funds trail the market average, due primarily to high fees?
• How do we deserve an "A" if the average mutual fund turns over its entire portfolio each and every year?
• How do we deserve an "A" when most mutual funds don't bother to vote their shares in an intelligent fashion?
• How do we deserve an "A" when we have a 401(k) program that disguises its fees and shunts investors into overpriced, under-performing funds?
• How do we deserve an "A" when our shareholder communications (starting with prospectuses) are unintelligible legalese, and 99% of them are thrown away unread?

Savvy investors in the United States can find great mutual fund products: products with low fees, high transparency and dedicated management.

But the majority of Americans are poorly served by mutual funds, which charge high fees for a substandard product and uses tantalizing advertisements to lure investors into chasing returns.

An "A"?  Not in my book.