Ameritor Mutual Funds: The “Dead Man Funds” Case Solution

This Case is about FINANCIAL MARKETS

PUBLICATION DATE: October 03, 2011 PRODUCT #: F276-PDF-ENG

The Ameritor family of mutual funds was nicknamed the “Dead Man Funds” due to its own dreadful operation as well as the premise that people who kept their cash in the funds had no alternative, in other words, they were dead. Established in the 1950s, the funds boasted $200 million in assets under management by 1970. However those amounts immediately fell by the late 1980s to almost nothing. Expense ratios skyrocketed as 40 percent per annum, the SEC filed numerous lawsuits, and turnover rates reach at 400 percent in a few years. By 2010, the mutual funds went out of business or had been liquidated. The case analyzes the death of the funds, emphasizing the investors who chose not to get rid of their capital together with the earliest outflow of funds.

Ameritor Mutual Funds: The “Dead Man Funds” Case Solution
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