Choose wisely. There is only one correct answer to each question.
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1.
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.
2.
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.
3.
Some fund companies make plans to close even before they roll out.
True. This is a strategic move on their parts.
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.
What does the "closed" in "closed funds" mean?
It is not accepting new investors. Closed funds are those that are barring new investors.
