If you are interested in taking a chance on a new mutual fund, hoping for outstanding results, what should you look for?
- A manager with an outstanding record. Some mutual fund companies reward up-and-coming analysts with positions as managers of new funds. These managers may turn out to be world-beaters, but you’re probably better off with a manager who has a record of success in running a fund.
- A sensible premise. You should know how the fund will invest its money. Is this an appealing market sector? How will it fit in with the rest of your portfolio?
- Flexibility. You may want to choose a fund that’s part of a larger group so you can switch to another fund without a sales charge, if the new fund doesn’t work out. virtually every week new mutual funds are offered for sale.
Not every promising new fund will be a winner, of course. Nevertheless, you may want to add some rookies to your lineup in the hope that your brash youngsters will outscore the old timers