Fair Weather Fund


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.

BREAKING DOWN '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.

  1. Bubble

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

    A financial market of a group of securities in which prices are ...
  3. Bear Market

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

    A mutual fund that tends to perform reasonably well during both ...
  5. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
  6. Foul Weather Fund

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