I was going to post this because I hadn't yet seen the word 'prospectus' in this thread, maybe it's still worth posting after Jim's post:

Read the prospectus!
Look for red flag words like "up to X% of the fund invested in SAFE STUFF", and "at the manager's discretion, the fund may invest up to Y% in LONG LIST INCLUDING SWAPSetc".

I once bought an investment grade bond fund (many years ago) that was receiving a lot of press because it was actively managed by a well-know person, was doing well, and had low fees.

What could go wrong?

It started not to do well.

I then looked at the holdings -- he was shorting the S&P. In a bond fund.
I then looked carefully at the prospectus, and saw words similar to the earlier quotes about "manager's discretion".

Learned two lessons (1) don't reach for yield (2) read the prospectus

Berkshire Hathaway FAQ

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