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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.
Why might a closed fund's returns slow down after a closing?
Because funds that close are usually experiencing abnormally high returns that must eventually come back down to earth. Funds usually close when inflows turn into torrents--and that usually happens when funds are undergoing a period of extraordinary performance. Performance often goes back to average (or worse).
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.
Declining tax efficiency in a closed fund is attributable to _______.
The closing itself.
5.
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.
