does the value of a fund have anything to do with how many people own them? (con'd)

does the value of a fund have anything to do with how many people own them?
...how many shares have been bought?

or does it have to do with the value of the holdings?

Is it better if more people own them? Less
Why do some funds close to new investors?

----
I see there are a few S&P 500 index funds out there. They are all selling at different prices. Are the higher priced ones higher because they have been open longer? or because more people own them?
or what?

GENERALLY SPEAKING, the fund value has no bearing on the number of owners. the value is what is divided amongst all shareholders at the end of any given trading day.

there can be some short term "value" change based on volume of purchases and redemptions made in a given trading period. this type of change is why you get those "up and coming penny stock "insider" insight" emails. crooks try to generate a lot of demand for a stock thus artificially inflating its true value.

... you are less likely to see this with legitimate company stock and even less so with publicly traded mutual funds.

some funds will close to new investors because the fund will simply have "enough" money to operate at peak efficiency. imagine that you need $5K to run your monthly budget. over the next year you receive $20K a month. wow! arent you happy!

of course you pay off some bills and perhaps you max out a roth and your 401k, but somewhere in there you are going to start worrying about taxes (which were previously pretty straitforward) and some family will hit you up for a loan or two, and before you know it you have 100K in cash in your savings that isnt invested. and you think, hey! this is some real money. i need to figure out how to invest this wisely."

well, that DISTRACTION is what happens with a mutual fund management team when they get tooooo much money. having a predictible amount coming in from their present investors is much better than largely fluctuating cash flows.

finally, the S&P (and all index funds) are ok investments but they are WAY OVERLY hyped by the folks selling them. you have stumbled upon one of their gimmicks. first, you can set the share price at any amount you want to.

the 1MO S&P 500 index sells for $1.00 per share.

the SoapVox S&P 500 index sells for $50. per share.

an investor puts $500 with me and gets 500 shares. he puts it with you and gets 10 shares. at the end of the year the S&P is up 10% and he has 500 shares with me worth 1.10 each for a total of $550. he has 10 shares with you that are worth $55 each for a total of $550.

note, watch out for fakir companies. these are the companies that offer their own index funds (like the USAA S&P 500) but they are really operated by another company (ie. Barclays). however, USAA adds a few extra basis points on the expenses and makes it sound like you are investing with them.

hope this helps ... others can add clarification or correction.