Funds Intermediate: 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.
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.
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.
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.
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.