Funds Intermediate: Fund Warning Signs

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1.
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.
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.
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.
4.
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.
5.
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.