I was wondering what are fund managers allow in terms of avoiding loses during market lows. Do they have a discretionary range in which to work or must they stay the course during this lows. I asked because my portafolio has suffered in the past week but not as much as what the markets has seen. I have a diversified portafolio (from China to Canada, Europe and USA - mostly equities).
2007-03-05 11:43:07 · 2 answers · asked by JC 1 in Business & Finance ➔ Investing
Mutual fund managers much be fully invested based on their prospectus. This can mean that a fund is up to 99% in the market at all times!
That said, some do have "some" flexibility to hedge their portfolios if it's part of their business prospectus.
Because the funds are so large, there's only so much selling / buying that the funds can do, so in most cases, they'll be trading longer term trends instead of daily or even weekly ones sometimes.
Hope that helps!
2007-03-09 09:59:39 · answer #1 · answered by Yada Yada Yada 7 · 1⤊ 0⤋
Each mutual fund is different. Some must stay fully invested (95-99% stocks, 1-5% cash to meet expected redemptions), others can go 20% or 30% to cash.
2007-03-05 14:18:04 · answer #2 · answered by gosh137 6 · 0⤊ 0⤋