RE:FYIAn interseting article to point out the pitfalls of split funds although this is basically aimed at passive investors. Some of the negatives are valid although not fully explained. That most splits basically return your capital with a bonus as the NAV dwindles if you subscribed to an IPO is not mentioned. Saying that you may incur fees to reinvest if a fund winds up is hardly an issue unless you use a full service broker who charges you an arm and a leg - my trades at most are $9.
It doesn't point out that splits can be lucrative for active investors who take advantage of a slide and then collect the distribution and capital gain during recovery as it seems a number of people here have done
The one thing it completely ignores is that the NAV, on some funds such as those from Brompton, are reported weekly or mid month and some members here (mouserman) have developed their own tracking that is usually dead on +- a few cents. This provides a transparancy that allows an investor to know exactly the value of the units they hold and if the NAV is getting down to that $15 cliff then there is no surprize when the distribution stops. That also becomes a great time to short. My most confident short ever was on DF when the NAV was obviously underwater and people were still willing to pay an over the top premium.
So splits are not a buy for those who are not informed or dilligent in closely following the NAV but they can pay handsomely otherwise.