http://fyinance.com/mutual-fund-questions/why-is-it-bad-for-a-mutual-fund-to-have-too-many-assets All things Financial, FYI Tue, 19 Jan 2010 22:07:29 -0600 http://wordpress.org/?v=2.9.2 hourly 1 http://fyinance.com/mutual-fund-questions/why-is-it-bad-for-a-mutual-fund-to-have-too-many-assets#comment-530 Jimmy Wed, 03 Jun 2009 17:53:01 +0000 http://fyinance.com/?p=287#comment-530 Basically, the reason is that it becomes harder to "move the needle" as Warren Buffett says. In other words, the more money a particular fund has, the larger any particular position has to be to make an impact on the funds results. A $10 million investment, no matter how well it does isn't going to have much impact on a $50 billion fund. The larger the fund, the larger the investments needed to make a difference. The larger the minimum investment, the smaller number of choices a particular fund manager has, and theoretically, the less well he'll be able to do. Basically, the reason is that it becomes harder to “move the needle” as Warren Buffett says. In other words, the more money a particular fund has, the larger any particular position has to be to make an impact on the funds results. A $10 million investment, no matter how well it does isn’t going to have much impact on a $50 billion fund. The larger the fund, the larger the investments needed to make a difference. The larger the minimum investment, the smaller number of choices a particular fund manager has, and theoretically, the less well he’ll be able to do.

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