Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
The practice of selling shares in a mutual fund and using the proceeds to buy shares in another mutual fund. An investor does this when economic conditions or his/her investment goals have changed. Because of the fees (known as loads) associated with buying and selling mutual funds, fund switching can be expensive unless one is switching within a fund family or between no-load funds.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
An investment activity in which shares in one mutual fund are sold and the proceeds from the sale are reinvested in another mutual fund. Fund switching results from an investor's changed perception of investment opportunities. For example, an individual may become bearish and switch money from a growth fund to a money market fund. Because of the high sales charges involved in purchasing some funds, fund switching is practical only if no-load funds are used or if the investor switches within a family of funds.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.