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1.
Most funds, after they close to new investors, experience worsened tax efficiency.
True. When funds close, returns may slow and tax efficiency may worsen.
2.
Closings work best for which types of funds?
Funds that traffic in illiquid securities such as micro- and small-cap stocks. Closings are also good ideas for funds with a small number of managers and analysts, or those that employ rapid-trading strategies.
3.
With regard to funds that are closing, it's best to _______.
Buy a fund after it reopens. Reopening is often a sign that an asset class is being overlooked.
4.
Declining tax efficiency in a closed fund is attributable to _______.
The closing itself.
5.
Some fund companies make plans to close even before they roll out.
