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Fund Spy

Evaluating Changes in a Multimanager Lineup

It's not a simple task, but that's no reason to stay away from these funds.

Most investors dread the day that their fund's portfolio manager departs. The new leader may lack suitable experience, have a less impressive record, or institute an unwelcome change in strategy. For shareholders, it takes time and effort to determine whether the fund is still worth owning. If the decision is no, selling it can cause tax complications, and finding a replacement takes more time and effort.

Even if shareholders decide to hold on, they must monitor the fund more closely afterward.