Thinking outside the box: should funds be required to invest within narrowly defined limits?

Kiplinger's Mutual Funds, March, 2006 by Schiffres, Manuel

JUST IMAGINE what the world of figure skating would look like if Michelle Kwan were told the only jumps she could make were Salchows. No toe loops. No Lutzes. No Axels. Or consider what professional basketball--and perhaps pop culture in general--might look like had Michael Jordan's coach told him the only shots he could take were jumpers. No thunderous dunks. No acrobatic lay-ups. No gravity-defying leaps to the basket.

As remarkable as it may sound, the mutual fund industry seems to be evolving that way. Increasingly, stock funds are being required to hew to a predetermined investing style, often clearly indicated by the fund's name. The name may include a phrase like "midcap value" or "small-cap growth" (cap is short for capitalization, or market...

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