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1.
A funds asset growth can lead to many problems. Which of the following is not typically one of them?
Higher expenses. As assets grow, expenses may decline. But performance may stall, and the funds manager may have to change his or her strategy to accommodate all that money.
2.
A funds performance can be affected when new funds are added to the family it belongs to.
True. Sometimes, a fund will lose its focus or change its role within the fund.
3.
Which type of fund is least likely to be affected by a change in management?
An index fund. Index funds mimic indexes; no matter who is managing, the selection of stocks will be according to that benchmark.
4.
Why might asset growth be a bad thing for some mutual funds?
It can ultimately lower returns. Having a lot of assets can sometimes weigh down returns.
5.
Why is it important to monitor your fund families?
Both of the above. Changes at fund families can mean changes at your fund if your manager takes on new responsibilities or is otherwise distracted from running the fund that you own.
