Below is a link to an article in Smart Money magazine. The article contends that as mutual fund asset sizes grow, the ability of the fund’s managers to outperform the market becomes tenuous. The debate as to whether mutual funds are a better vehicle than ETFs aside, the article does present some very interesting data to support its premise. This conclusion applies to both equity and bond funds.
To quote from the article, “But perhaps the most intriguing problem megafunds face, some critics say, is that as they grow, the link between their revenue and their performance can become more tenuous — leaving them with less incentive to excel for their shareholders. More than 70 percent of rival funds beat the 2011 performance of the Growth Fund of America.”
Just a hint of caution, keep in mind the size of the fund, among many other issues to consider.