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Funds Consolidation?
Old 11-01-2008, 10:55 AM   #1
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Funds Consolidation?

Has anyone thought about consolidating funds? It seems to be a good time to combine funds of overlapping sectors/markets into a couple of funds, e.g., Vanguard World Index ETF (VT). As for me, the capital gains would be minimal because of the recent market downturn.

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Old 11-01-2008, 11:20 AM   #2
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I have actually been concerned that this might happen anyway without my consent! I'm wondering if some funds get so small they get merged into other funds.

I know that Third Avenue Value has been hit very hard by redemptions all year. I start wondering what happens if the fund gets "too small". I don't think a mutual fund has ever just closed, sold remaining assets and returned cash to investors (like hedge funds do), but rather gets absorbed into another fund. But what about the smaller funds shops like Third Avenue and Dodge and Cox whose investing style has been severely punished by the current situation?

There is a world of hurt out there. Anything with a value or international or non-treasury bonds bias has just been taken out and shot!


P.S. I used 2002 to do a lot of consolidation and "upgrading" of mutual funds taking advantage of tax loss selling. Now, I don't have such changes to make as I remained "consolidated". Some of my "trusted" funds have performed extremely poorly due to this downturn, but it is because the investment style was punished, not due to a problem with fund management. So, I can only hope these overly punished funds will get overly rewarded on the upside. But the darn redemptions have to stop first!!!!
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