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Funds 502: Fund Warning Signs

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1.
Why might asset growth be a bad thing for some mutual funds?
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It can ultimately lower returns. Having a lot of assets can sometimes weigh down returns.
2.
Which type of fund is least likely to be affected by a change in management?
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An index fund. Index funds mimic indexes; no matter who is managing, the selection of stocks will be according to that benchmark.
3.
Why is it important to monitor your fund families?
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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.
4.
A funds performance can be affected when new funds are added to the family it belongs to.
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True. Sometimes, a fund will lose its focus or change its role within the fund.
5.
A funds asset growth can lead to many changes. Which of the following is often one of them?
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All of the above. All of these are possible effects of asset growth.