I've mentioned this one to you guys (and gals) here in the past. I found this interesting...
(old report I know, just found it)
Motley Fool
Vanguard Slams the Door
Friday April 21, 11:26 am ET
By Rick Aristotle Munarriz
In what has become a painful trend for investors chasing hot funds, another popular mutual fund is closing the door to new investors. This time it is Vanguard Strategic Equity Fund (FUND: VSEQX) that will be turning back new money. According to Morningstar (Nasdaq: MORN - News), the fund has beaten the S&P 500 for six consecutive years.
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Fund families close hot funds for a reason. Fund managers hate to compromise their investing strategies -- and that's what may happen when an opportunistic fund like Strategic Equity, which looks to snap up small and mid-cap stocks, grows to nearly $7 billion in net assets. Over the past two years, Vanguard has closed six other funds when their asset bases started becoming a bit unwieldy.
Vanguard isn't stopping there, though. It is raising the minimum and capping the annual maximum on two of its largest funds. Wellington Fund (FUND: VWELX) and Windsor II (FUND: VWNFX) will see their minimum investing requirements for new accounts bump up from $3,000 to $10,000.
That's fine. It's a good way for Vanguard to slow the inflow of assets at the huge funds, and by weeding out smaller accounts, the cost-efficient crew at Vanguard will be able to run an even tighter ship. The puzzling part is Vanguard placing a $25,000 maximum investment in the two funds by an account holder in any given year. One would think that Vanguard would want to attract these fatter accounts, especially since both funds already command well in excess of $40 billion in neat assets apiece and have worn the additional weight well.
To help offset the closure, Vanguard will be launching the Vanguard Strategic Small-Cap Equity Fund, but one can only imagine that -- with "small-cap" in its moniker -- it will close well before its asset base grows past a billion or two.
That doesn't mean one should jump onto the new fund, but it certainly beats trying to chase the behemoths that Vanguard thinks are growing too quickly for their own comfort levels.
Longtime Fool contributor Rick Munarriz believes that mutual funds are an important part of any stock portfolio. He does not own shares in any of the companies mentioned in this story.
The Fool has a disclosure policy. Rick is also part of the
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