Funds Intermediate: Fund Warning Signs

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1.
A manager change at a fund is _______.
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A warning sign that change may be on the way. Manager changes can lead to a drop-off in performance or a change in strategy, so theyre certainly warning signs. However, some types of funds handle manager changes better than others. As a result, a manager change isnt an automatic sell signal.
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.
Which government source provides you with information on funds?
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Securities and Exchange Commission. The Securities and Exchange Commission provides the EDGAR database of information on funds.
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 a mutual fund family grows, its funds will continue to perform their original roles.
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False. Sometimes a fund changes its focus, for example from small-cap to mid-cap.