Richard CanfieldPodcast Host and IBC Advisor, Ascendant Financial · Authorized Infinite Banking Practitioner | Author of 4 Books

he Mutual Fund Trick Nobody Talks About

8 Dec 2025 · 1 min

Watch on YouTube

0:49

Short conversational excerpt in which Speaker A and Richard Canfield discuss a questionable mutual-fund practice: large, highly rated funds are 'backfilling' smaller, low-rated funds (outside the asset class) into their top holdings — a tactic Speaker A likens to a Ponzi-like scheme and criticizes as fundamentally unsound.

Chapters

I started noticing these five star funds and what they were doing is they were backfilling their one star funds into their, into these five star funds as major holdings. But the one star funds were outside of the asset class. So like ABC Large Cap Fund. Right? It's a five star and it's great. And one of its top holdings would be the one star ABC Small Cap Fund. And I'm like, that doesn't make any sense from a fundamental standpoint. And really, that just smells kind of like a Ponzi scheme to me, you know? And so I started pointing this out.
Like, our one star funds aren't doing very good. Let's buy some of their units with our bigger fund that's doing well.