Reclassification
In the financial world, “reclassification” refers to moving a mutual fund from one class, or category, to another.
There are thirty-two million reasons why a mutual fund might be reclassified. That’s probably an exaggeration, but...there are a lot.
For example, let’s say we’re invested in a back-end load fund, which means we have to pay our broker a 4% fee when we redeem the shares. The manager of the fund decides this whole back-end load thing isn’t really working for her firm, so they decide to reclassify it as a front-end load fund, which means we pay a fee when we purchase shares instead of when we sell them.
Reclassifications can be triggered by a number of things, ranging from changes in the economy to an individual investor’s investment account balance. The goal is to make sure that the fund is performing as well as it can, both for the investors and for the firm managing the fund.
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Finance: What is a Diversified Mutual Fu...20 Views
finance a la shmoop what is a diversified mutual fund? all right people
listen up it's lots of investments stocks bonds exposure to risk and reward [Risk and reward punch man in face]
everywhere energy, telecom, insurance, real estate, banking, chemicals, tech, retail not
enough diversity yet well those are just sectors or industries and there's a
whole bunch of them what about geography geographic diversity the US, Russia, China
Europe someday maybe Mars Elon what do you think well maybe exposures to [Elon Musk floating in space]
different currencies or commodities cycles as the diversity you seek hmm
well that's diversity Benetton eat your heart out so the bigger question is why
would you want such diversity? well the idea is that you mitigate risk by being
diverse the don't put all your eggs in one basket thing if one investment goes [Value of investment graph appears]
bust well at least you have plans B C and D to fall back on and if this is
grabbing you check out our videos on efficient markets theory for more on the
subject or maybe diversify your knowledge and watch all of our finance
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