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Originally Posted by usnavy_233
You have some good points here. Yet another reason that I like to purchase funds such as CGMFX is because the manager IS free to move in and out of a particular arena where as most managers essentially have their hands tied in regards to the amount of risk they can take.
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Focus funds, or "boutique" funds as they're sometimes called, are nice funds to hold as a smaller part of a portfolio since they can "roam" wherever the manager sees fit. However for that reason and the limited holdings some have, they shouldn't be considered a "core" fund in your portfolio since it's hard to keep track of where it's at and not enough diversification within the fund causes huge standard deviations. One other aspect to keep track of with these type funds is their total asset amounts. They tend to post really good returns and in seeing that people dump money into them which in turn could become too much for the manager to handle. If he/she doesn't close the fund and has to end up either sitting on cash or investing in things they really don't want to but have to due to the continually huge influx of money, the returns could start to suffer. This is mostly seen in smaller-cap funds but can occur in larger cap ones also if there's only a limited number of stocks to be held by the fund.