Funds Intermediate: Fund Warning Signs

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1.
A funds asset growth can lead to many problems. Which of the following is not typically one of them?
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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.
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.
3.
If a mutual fund starts out as a small-cap fund, it may eventually become a mid-cap or large-cap fund.
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True. Some funds change their focus years later.
4.
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.
5.
As funds grow, how do managers often change their strategies?
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They buy more stocks. To accommodate asset growth, some fund managers will buy more stocks, buy larger companies, or trade less.