Vanguard Asset Management has closed its two actively managed equity funds to all new investors to limit cash flows and protect the interest of the funds’ current shareholders.
The two equity funds will are Vanguard US Discoveries Fund and Vanguard US Opportunities Fund.
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Vanguard said that the shareholders will be permitted to continue making additional share purchases without limitation in existing accounts.
Managed by Granahan Investment Management, the Vanguard US Discoveries Fund invests mainly in US stocks with market capitalizations of less than US$700 million that are judged to be capable of strong growth.
The Vanguard US Opportunities Fund, managed by another sub-adviser, Primecap Management, invests primarily in small and mid-cap US stocks and is benchmarked to the Russell 3000 index. The fund’s assets under management more than doubled during 2013 to $1.8 billion, during which period its total return was 50%.
Thomas Rampulla, managing director for Vanguard in Europe, said: "Vanguard is proactively taking steps to reduce cash flow into these funds in order to help preserve the portfolio managers’ ability to effectively manage the funds.
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By GlobalData"Our commitment is to protect the interests of the fund’s current shareholders and, when necessary, we take pre-emptive action to restrict cash inflows to maintain fund assets at reasonable levels."
