AboutWarren Boroson Expertise Author of "Keys to Investing in Mutual Funds" (Barrons), "Ultimate Mutual Fund Guide" (Probus), "How to Pick Stocks Like Warren Buffett" (JKLasser), and "The Reverse Mortgage Advantage" (McGraw-Hill). Former financial columnist for Gannett News Service.
Experience Author of 20 books; winner of 1996 Personal Finance award from Investment Company Institute and Washington University. Formerly on staffs of Money and Sylvia Porter's Magazine. Had a radio program (on WEVD) about mutual funds and a newsletter, FundDigest.
Question Hello. I have a Roth IRA with INVESCO. The SEC has filed a complaint, they say that INVESCO failed to include some disclosures in their prospectuses and that entered certain arrangements permitting the fund's independent directors to time the market.In total, the SEC alleges violations of around 10 sections of the Securities Act.
How serious is this problem INVESCO is in? Would it be advisable for me to redeem my Roth IRA? Having in consideration that's a Roth IRA, is there any way I can close the account avoiding the penalty?
Thanks in advance,
Richard
Answer Dear Richard Grant:
A big consideration in deciding whether to leave a fund family that has been experiencing ethical problems is: Would you have capital-gains taxes to pay? Because you have a Roth IRA, you need not worry. You can leave whenever you like. You can avoid penalties by directing a third party--Vanguard, Fidelity, T. Rowe Price--to roll-over your account to one of their funds. Call one of these families, or another one, and ask for a form for you to roll-over a Roth IRA.
INVESCO has been in a little trouble, but not major trouble. And INVESCO will pay whatever penalties the SEC considers appropriate.
The question for you is: Is the INVESCO fund you own a good fund? Has it done as well as you had hoped? Is it still appropriate for you?
Morningstar rates the average of nine INVESCO funds a little below average. I suspect that you can do better.
