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.
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.
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.
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.
5.
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.