Hmm... A "small cap" fund, and 7 of its top 10 holdings belong to the Dow 30! A severe case of "style drift-itis", I should say! This is the reason why, in my opinion, any asset allocation in mutual funds has to be in various index funds (Bond Index, Small cap index, Growth index, Overseas index, Gold and precious metals index, etc. etc.), so that there is little room for fund managers to monkey around with your assets.
Here's an equally severe case of "style drift-itis" -- I recently got a letter from Fidelity Overseas Fund (in which I have a part of my 401(k) money) asking me to vote on a few things -- essentially giving them a "carte` blanche`" with regard to where and how they invest. If they win the vote, they could invest a large chunk of money in the US, if they want to. And not only that, they can also invest as much as 25% in a single company!
So if the US market tanks and I pat myself on the back for having invested overseas, and then I find that the fund had put 25% of its money in Coke, which happened to go down 50%, and 50% of the money in the US market, which happened to go down 30%... now, that would be cause for celebration! ;-)
Dipy. |
