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How To Tell If Your Mutual Fund Is Dying

TedTed
in Fund Discussions
FYI: As many investors pull money from actively managed stock mutual funds, shareholders who stay put may face special risks.

For one, funds must have cash ready to pay investors who are bailing out. That may force a fund manager to sell securities in the portfolio — including stocks that the manager believes have great long-term potential.
Regards,
Ted
http://www.latimes.com/business/la-fi-investing-quarterly-dead-funds-20170409-story.html

Comments

  • expatsp
    Am wondering if this applies to FAAFX. But so much of the money is Bruce's own at this stage.
  • VintageFreakVintageFreak
    edited April 2017
    It is only because Berko has so much of his own money invested I didn't bail on FAIRX. He can keep his funds alive all by himself. And for all his faults, not literally investing his net worth is his funds is not one of them.

    It is the Stewart Mid Caps and the Whiteboxes and the like one has to worry about.

    All things aside, this tidbit from that article takes the cake...

    A Vanguard Group study of funds that were either liquidated or merged from 1997 through 2011 found that, in the 18 months before their demise, dying stock funds performed significantly worse than the typical fund in their investment category.

    Who thought a fund hitting the cover off the ball would die ?!?!?! And a fund that did that and decided to close and return money to its shareholders hardly "died".

    I'm telling you I did the right thing keeping (at least one so far) of my daughter's away from STEM. One needs to take some special classes to develop the kind of wisdom needed to helm such classic situations and then to pen about them.
  • expatsp
    @VF. Yup.
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