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The warning signs a fund is getting too big

by Danielle Levy on Jun 16, 2014 at 14:49

Five questions to ask 

There are no hard and fast rules when it comes to working out whether a manager’s style is changing as a result of the size of the fund. Each manager is different and how much money they can run before they are affected will depend on the markets they invest in.

However, Sarasin’s Oliver Tucker has revealed five questions to ask to ensure size is not compromising the fund manager’s style. If asset growth over the past 18 months is over 100%, he suggests there could be grounds to feel nervous.

1) How good has recent performance been?

2) How much crossover is there in the top holdings of the fund compared with funds that have a similar ranking?

3) How does the fund’s performance compare to its history?

4) And how does this fit with previous patterns in the fund manager’s history?

5) What have the asset flows over the last 18 months been?


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