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1.
A fund might decide to close because it has become too large, asset-wise.
True. Excessive assets may force the fund managers to try a change in strategy.
2.
Once a fund closes to new investors, it will not reopen.
False. Many funds have reopened, some of them more than once.
3.
What does the "closed" in "closed funds" mean?
It is not accepting new investors. Closed funds are those that are barring new investors.
4.
When a closed fund reopens, it might be a sign to investors that _______.
An asset class is being overlooked and is worth a second look.
5.
Which is not true about most funds after they close?
Their tax efficiency improves. When funds close, returns may slow and tax efficiency may worsen. Inflows, which are negligible once a fund closes, reduce the tax burden on all shareholders because there are more people to distribute capital gains to.
