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. Bull Market

    A financial market of a group of securities in which prices are ...
  2. All Weather Fund

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

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

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

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

    1. An economic cycle characterized by rapid expansion followed ...
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. Will ETFs Eventually Replace Mutual ...
    Mutual Funds & ETFs

    Will ETFs Eventually Replace Mutual ...

  4. Understanding The Bond Behemoth That ...
    Mutual Funds & ETFs

    Understanding The Bond Behemoth That ...

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center