Welcome to the latest installment of our weekly fund review, in which we scrutinize the past week's notable fund news and tell you what it means for Foolish investors.

Bogle denounces active management
Vanguard founder John Bogle is well-known for advocating a passive approach to investing. In a recent interview, Bogle reiterated his view that searching for active managers who can beat the benchmark is a waste of time. He noted that even long periods of time may not be adequate enough to judge whether or not a manager actually possesses stock-picking talent.

During the interview, Bogle provided some details on his own portfolio, which he said is held entirely in Vanguard funds. He does not own any alternative investments, and he shared that roughly 90% of his assets are in index or index-like funds. Currently, Bogle holds about 60% of his assets in bonds and 40% in equities.

I like John Bogle -- he's got a lot of common sense. And you have to admire someone who puts all his money where his mouth is. I agree that trying to find good active managers that will consistently beat the benchmark is a very difficult task.

But I don't consider it impossible, nor a waste of time. Successful funds share certain traits, including a consistent investment process, a long-tenured management team, and a track record of solid performance in markets good and bad. Investors who take the time to find funds with these traits have an excellent chance of coming out ahead. Of course, if you'd rather just chuck the whole search and be contented with a market rate of return on your investments, feel free. After all, it's good enough for John Bogle.

Closed-end fund discounts continue to widen
Closed-end funds have been one of the casualties of recent market volatility. As investors flee the market, these funds have fallen from favor with astonishing speed. Discounts on closed-end funds have grown bigger and bigger amid ever-fewer buyers. As recently reported by The Wall Street Journal, the median discount for closed-end funds was 6.5% as of Aug. 20.

Some funds have fared even worse. The Lazard Global Total Return & Income Fund (NYSE:LGI) is trading at a roughly 12% discount, despite holding blue-chip stocks such as Johnson & Johnson (NYSE:JNJ) and IBM (NYSE:IBM). The Morgan Stanley Global Opportunity Bond Fund (NYSE:MGB) has hovered around a 10% discount to net asset value. If these trends continue, some closed-end funds may eventually be targeted for mergers or liquidation.

This just goes to prove yet again that what goes up can, in fact, come down. Closed-end funds surged in popularity in recent years, leading more and more investors to enter this corner of the market. When Wall Street shows speculative interest in any investment product, its days at the top are likely numbered.

But this drop means that there will be a lot of good closed-end bargains emerging in the coming weeks. If you were hesitant to snap up a closed-end fund before, you have a prime opportunity now to snag some assets that will likely be trading at a much greater discount. Just be aware that if market volatility continues, closed-end funds could be in for some more bumps. But what goes down the most also has the most room to come back up -- a good reason to keep closed-end funds on your watch list.

130/30 funds run into trouble
Another investment-of-the-moment that seems to have encountered some turbulence is the much-vaunted 130/30 fund. These funds sell short 30% of the portfolio's assets, then reinvest that cash in long positions, resulting in a 100% market-neutral position.

But 130/30 funds have been battered by recent market volatility, drying up their inflows of new investment. Some 130/30 funds, including those run by Goldman Sachs (NYSE:GS) and Barclays (NYSE:BCS), have suffered losses disproportionate to the broader market in recent weeks. Because these funds are using leverage to invest, their losses have been greater than most long-only funds.

Leverage is often seen as a tool to boost returns -- but investors should remember that it boosts potential losses, too. That's the risk inherent in 130/30 funds. Investors who turn to these funds hoping for a quick shot of extra returns can be unpleasantly surprised when things go sour.

Keep a level head when it comes to investing trends. When in doubt, stick with the tried and true, and don't be lured by shiny new ideas that make no sense for your portfolio. Think big, invest in diversified, broad-market mutual funds, and leave the trends to other investors. You may not get the market's highest highs of the market, but you'll also be spared its lowest lows.

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Fool contributor Amanda Kish lives in Rochester, N.Y., and does not own shares of any of the companies or funds mentioned herein. Johnson & Johnson is an Income Investor recommendation. The Fool's disclosure policy takes an active interest in your financial well-being.