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1.
Declining tax efficiency in a closed fund is attributable to _______.
The closing itself.
2.
Once a fund closes to new investors, it will not reopen.
False. Many funds have reopened, some of them more than once.
3.
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.
4.
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.
5.
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.
