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.
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.
3.
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.
4.
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.
5.
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.