Is My Fund a Liquidity Trap?

The likelihood that your fund has major liquidity risks is low, but here’s a checklist to help concerned investors decide

Jeffrey Ptak 16 July, 2019 | 10:59AM

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As we have seen in recent weeks, open-ended funds and illiquid investments are a potentially lethal combination. But, despite the panic, investors don’t actually need to fret too much that their fund is a liquidity trap.

The most popular funds invest largely, if not entirely, in very liquid assets – publicly traded large-cap stocks, government debt, and the like. That said, the risk can’t be entirely ruled out, as episodes such as Woodford Equity Income remind us.

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Jeffrey Ptak  Head of Manager Research

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