New funds have some advantages over larger, older funds, as noted in a recent Fortune article about interesting young funds:
Some of the rookies, though, have genuine all-star potential, whether because of a smart strategy, proven management, or - as you'll find in the funds that follow - a combination of both. Adding to their appeal, new funds can actually have some advantages over their more established counterparts. They tend to be smaller, for example, allowing managers to invest more nimbly."
But while new funds do offer real competitive advantages over their old-fogey counterparts, there is one critical downside for being a Ponce de Leon investor: new funds are often launched to meet ill-timed investor demand. We saw new tech and internet funds launched when fund investors were infected with dot-com mania, new commodity oriented funds after a hot run in oil and gold, and a flurry of international funds after a run of foreign stocks beating the U.S.
A winning fund investor should be open to new and small funds, but ask themselves: is this just a fund being launched to satisfy performance chasing investors...or is this a genuinely good time to buy this type of fund from this manager or company?
New funds have some advantages over larger, older funds, as noted in a recent Fortune article about interesting young funds:
Some of the rookies, though, have genuine all-star potential, whether because of a smart strategy, proven management, or - as you'll find in the funds that follow - a combination of both. Adding to their appeal, new funds can actually have some advantages over their more established counterparts. They tend to be smaller, for example, allowing managers to invest more nimbly."
But while new funds do offer real competitive advantages over their old-fogey counterparts, there is one critical downside for being a Ponce de Leon investor: new funds are often launched to meet ill-timed investor demand. We saw new tech and internet funds launched when fund investors were infected with dot-com mania, new commodity oriented funds after a hot run in oil and gold, and a flurry of international funds after a run of foreign stocks beating the U.S.
A winning fund investor should be open to new and small funds, but ask themselves: is this just a fund being launched to satisfy performance chasing investors...or is this a genuinely good time to buy this type of fund from this manager or company?