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You Can't Judge a Mutual Fund By Its Cover

New SEC rule requires funds to be more true to their names.

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Government regulators recently said mutual funds have to do more to make sure their investments match the strategies implied by their names. The new rule from the Securities and Exchange Commission, however, does not mean its safe to start judging funds by their monikers.

Indeed, the SEC and all of the fund junkies here at Morningstar say even with the tighter rule, a fund's name is but one small piece of information investors should use to build their portfolios.

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Dan Culloton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.