Course 504: When to Sell a Fund
The Fund Changes Its Strategy
In this course
1 Introduction
2 The Fund Loses More than It Should
3 The Fund Gains More than It Should
4 The Fund Changes Its Strategy
5 The Fund Underperforms for a Long Period
6 Your Goals Change
7 You Just Can't Take It Anymore

Presumably, you buy a small-value fund because you want exposure to small-value stocks. If the manager suddenly starts buying large-growth stocks, you may have a problem. After all, you may already have a large-growth fund in your portfolio.

Be careful in how you define a change in style, though. Sometimes a manager's stocks and habits will change, even though his underlying strategy hasn't. Baron Asset BARAX is a case in point. The fund didn't migrate from the small-growth to the mid-cap growth category because manager Ron Baron began buying larger stocks. He still buys small-cap issues; he just holds onto them as they move into mid-cap or large-cap range.

Next: The Fund Underperforms for a Long Period >>


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