FYI: If your mutual fund holds securities that are less frequently traded and, therefore, less liquid, then you could be incurring higher trading costs that show up in your fund’s NAV, if not in your brokerage statement. Not only that, your fund also needs to maintain enough liquidity to ensure that it can efficiently and quickly process shareholder redemption requests. These liquidity concerns can directly impact the risk-adjusted returns expected by investors from such funds.
Regards,
Ted
http://mutualfunds.com/education/implications-liquidity-risks-in-mutual-funds/
