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.
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.
3.
Which of the following is not a good way to find out if your fund is on the verge of change?
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Keep an eye on your funds performance only. Fund performance isnt everything; it wont reflect a manager change, for example, or clue you in to changes that may be on the horizon.
4.
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.
5.
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.