Ameritor Mutual Funds: The \"Dead Man Funds\"

Ameritor Mutual Funds: The \"Dead Man Funds\"

By
Jonathan Berk, Debra Schifrin
2011|Case No.F276

The Ameritor family of mutual funds was nicknamed the “Dead Man Funds” because of its terrible performance and the assumption that those who kept their money in the funds had no choice, that is, they were dead. Established in the 1950s, the funds boasted $200 million in assets under management by 1970. But those numbers quickly dropped to practically nothing by the late 1980s. In 1989, Morningstar Inc. told investors, “We urge you to cut your losses and get out.” Expense ratios skyrocketed as high 40 percent per annum, numerous lawsuits were filed by the SEC, and turnover rates hit 400 percent in some years. By 2010, the mutual funds had either been liquidated or went out of business. The case examines the demise of the funds, highlighting the initial outflow of funds as well as the investors who chose not to remove their capital.

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