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 Capital Appreciation (M...10411 Views
Finance a la shmoop what is capital appreciation as in the sense of an
investment fund or a mutual fund you know that is like what does it mean to
have a mutual fund with a focus on capital appreciation all right people
think more, more assets all right you have capital and yes you [Woman with a vault full of money]
appreciate having that capital but you'd appreciate it more if there was more of
it like it appreciated so a capital appreciation fund is one which focuses
on just growing the assets bigger and bigger don't really care how the capital
gets grown don't necessarily need dividends don't necessarily need minimum
p/e ratios don't necessarily need balance sheet covenants on the
investments you make don't care if it's exposed to the Venezuelan oil companies [Venezuela city landscape]
or the Australian dollar in a cap app fund well you just want the dough to [Money falls into flower pot]
grow and this ethos is in contrast to other flavors of funds which for example
need to throw off cash in the form of dividends like in a growth and income
fund or interest like in a bond fund like you know it's cash people need to
live on right so those have to do a capital appreciation does not so what's
a typical investment in a capital appreciation fund well usually be
something like a mega trend tech stock that just grows or appreciates with time [Man typing on laptop]
and really doesn't throw off much if any of a dividend like Amazon, Netflix
Facebook, Google those guys so think of a capital appreciation fund is the body [Man wearing underpants in a locker room]
builder of the mutual fund world it just wants to grow everywhere
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