Fair Weather Fund

AAA

DEFINITION of 'Fair Weather Fund'

A type of mutual fund that has a tendency to perform well during a bull market. In other words, it is a mutual fund that generally outperforms the market when the market is doing well, and underperforms the market when the market is doing poorly.

INVESTOPEDIA EXPLAINS 'Fair Weather Fund'

Fair weather funds are very active during bull markets. For example, mutual funds that focused on technology companies in the early stages of the tech bubble in the 1990s were very successful. To determine whether a prospective mutual fund is a fair weather fund, simply compare the fund's relative returns to the market index during both bear and bull markets.

RELATED TERMS
  1. All Weather Fund

    A mutual fund that tends to perform reasonably well during both ...
  2. Bear Market

    A market condition in which the prices of securities are falling, ...
  3. Foul Weather Fund

    A mutual fund that tends to perform well or better than the overall ...
  4. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
  5. Bubble

    1. An economic cycle characterized by rapid expansion followed ...
  6. Bull Market

    A financial market of a group of securities in which prices are ...
Related Articles
  1. Mutual Fund Tune-Up Delivers High-Powered ...
    Mutual Funds & ETFs

    Mutual Fund Tune-Up Delivers High-Powered ...

  2. Mutual Fund Basics Tutorial
    Mutual Funds & ETFs

    Mutual Fund Basics Tutorial

  3. 5 Things You Need To Know About Index ...
    Investing Basics

    5 Things You Need To Know About Index ...

  4. What are the benefits and costs (or ...
    Mutual Funds & ETFs

    What are the benefits and costs (or ...

Hot Definitions
  1. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  2. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  3. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  4. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  5. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  6. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
Trading Center