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How To Invest In A Mutual Fund That Is Closed To New Investors
Two weeks ago I published a list of 17 mutual funds whose managers have been at the helm for 10 years, outperforming the S&P 500's 10 year return of 10.61% and their category benchmark by enough of a margin to make a difference to investors.
This starts by saying "choose the manager not the fund", but goes on to explain how you can struggle to buy the fund. Why not simply follow this advice and consider other funds run by the same manger?
"Whoever you give a fund share to then becomes an existing investor who can also make additional investments and give away fund shares."
That might work for a fund like EISMX, where the prospectus reads:
The Fund has discontinued all sales of its shares, except shares purchased by: (1) existing shareholders (including shares acquired through the reinvestment of dividends and distributions and those who received Fund shares in connection with a reorganization);
but will it work with a fund like BCSIX? For some funds, in order to buy more shares you not only need to be an existing shareholder now, but also as of the date the fund closed. The prospectus for BCSIX reads:
Existing shareholders as of October 18, 2013, the Fund’s closing date, are permitted to make additional investments in any account that held shares of the Fund on that date
But not into a younger account.
The article says that 17 out of 23 funds that "passed muster" were open. Then goes on to say that the five managers listed here are the ones running the closed funds.
I always wonder about anonymous financial writers who say that 23 - 17 = 5
Maybe these five managers ran all six closed funds? (So what's the sixth fund?) Is it saying that Fried (Primecap) is the only manager of POAGX that "passed muster"? Seems it is really listing funds (five of the six), not managers.
Comments
"Whoever you give a fund share to then becomes an existing investor who can also make additional investments and give away fund shares."
That might work for a fund like EISMX, where the prospectus reads:but will it work with a fund like BCSIX? For some funds, in order to buy more shares you not only need to be an existing shareholder now, but also as of the date the fund closed. The prospectus for BCSIX reads:But not into a younger account.
The article says that 17 out of 23 funds that "passed muster" were open. Then goes on to say that the five managers listed here are the ones running the closed funds.
I always wonder about anonymous financial writers who say that 23 - 17 = 5
Maybe these five managers ran all six closed funds? (So what's the sixth fund?) Is it saying that Fried (Primecap) is the only manager of POAGX that "passed muster"? Seems it is really listing funds (five of the six), not managers.