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What are the ramifications of getting out of a bad mutual fund? When I was under 18, my family set up a taxable mutual fund account for me with the intention of using it for college education. I didn't use the money for college, and now have more control over the account since I'm a legal adult and financially independent. The more I've researched the mutual funds in that account, the less I like them. Two are actively managed small-cap funds with expense ratios of 2.12% and 1.89%, not including a 1% 12-1b fee. They also have a deferred load that only applies if you haven't held the fund very long, but I don't think that would apply since I've held the funds for several years now. Another is a closed-end bond fund that has an expense ration of 1.38%, and I don't like how the dividends bump up my taxable income since I never really see them.
I mostly want to get out of these funds because they seem so expensive, especially compared to some of the Vanguard funds I've researched. I also can't find much information about them, particularly the bond fund. I'd much prefer a low cost index fund, or even a balanced fund that tracks several indexes. While the original goal for this money was education, I'm thinking of using it as a house downpayment (more than 5 years out) or as a backup retirement fund. I guess I'm just trying to see the downsides of switching out of these funds into something else- massive tax increases, fees, etc. I'm kind of new to this investing thing, and don't want to make any rash decisions.
I mostly want to get out of these funds because they seem so expensive, especially compared to some of the Vanguard funds I've researched. I also can't find much information about them, particularly the bond fund. I'd much prefer a low cost index fund, or even a balanced fund that tracks several indexes. While the original goal for this money was education, I'm thinking of using it as a house downpayment (more than 5 years out) or as a backup retirement fund. I guess I'm just trying to see the downsides of switching out of these funds into something else- massive tax increases, fees, etc. I'm kind of new to this investing thing, and don't want to make any rash decisions.
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