Course 502: Fund Warning Signs
Keeping Watch
In this course
1 Introduction
2 Asset Growth
3 Manager Changes
4 Fund-Family Growth, Mergers, or Acquisitions
5 Keeping Watch

How can you find out if your funds are on the verge of change?

First, keep tabs on your fund families using the public information available. Regularly visit their Web sites and look for news of growth plans, mergers, and new fund launches. Get access to information on funds in the pipeline in the EDGAR section of the SEC's Web site (sec.gov), where fund families must register their funds. Finally, always scan the marketing materials that jam your mailbox.

Next, turn your attention to third-party sources, including Morningstar, and learn what these groups have to say about your funds and your fund families. Firms such as Morningstar aren't in the business of selling their own funds and they take their roles as industry watchdogs seriously. Check out our fund news, read our fund analyses, and see what other investors in your funds are saying on our conversation boards. Make sure to read what members of the financial media are saying, too.

Finally, check up on your funds each month to make sure that things are status quo. Have their assets grown rapidly? Are their managers still in place? Is there anything notable going on with the fund family?

If you find that changes may be afoot, ask questions. If you find that your fund family is launching a new fund that sounds a lot like the fund you already own, for example, ask how the funds will differ and if this will mean more work for your fund manager. Or if you're worried about asset size, find out if the family plans to close the fund any time soon.

Next: The Quiz >>


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