Fund Liquidations: Another Sure Sign of a Bear Market
The Utopia fund family in a dramatic move registered with the SEC to liquidate all of it's mutual funds as of December 22nd, 2008. With a -47% YTD return and only $30 million in assets, the Utopia Growth Fund is a not large enough to survive the large wave of redemptions I suspect are triggering the liquidation. The ironic thing about the liquidation is that on the Utopia website the goal of the Utopia Growth Fund is described a:
- Growth and compounding through consistent absolute total shareholder returns
- Strategically limit downside volatility
- Serve as vehicle to harness the power of your good intentions
Nice sentiment. Too bad they couldn't execute on limiting the "downside".
This type of news will likely be very common in the mutual fund industry as investors vote with their pocketbooks and pull money out of losing mutual funds. The large mutual funds with billions in assets will weather the withdrawals, but smaller funds will be pressured to liquidate or merge with other funds.
Michael