Closed To New Investors

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Dictionary Says

Definition of 'Closed To New Investors'

Mutual funds and hedge funds that do not accept investments from those who are not already existing investors in such funds. While these funds are closed to new investors, in most cases they may allow existing investors to add to their holdings.

A situation where a fund shuts its doors to new investors is likely to arise when a fund has already attracted large inflows from investors over a period of time, usually due to successful investment performance. As a result, it has probably grown to such a size in terms of assets that the fund managers believe continued outperformance may be increasingly difficult.

Investopedia Says

Investopedia explains 'Closed To New Investors'

The decision to close a fund to new investors is not an easy one to make, since the fund is potentially giving up a significant amount of management fee income. However, the very act of turning away new investors may enhance the attraction of the fund to certain investors, ensuring that it can attract substantial inflows if and when it opens up to new investors. The caveat here is that the fund needs to continue to be an outperformer during the period when it is closed to the public.
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'Closed To New Investors'

  • Closing Mutual Funds: Investment Protection Or Trap?

    http://www.investopedia.com/articles/mutualfund/03/080603.asp
    ... Funds," published in 2003, cites a study in which Morningstar tracks the performance
    of a group of open-end funds that closed their doors to new investors. ...

  • CFA Level 1 Study Guide - Alternative Investments - Open and ...

    http://www.investopedia.com/exam-guide/cfa-level-1/alternative-investments/open-closed-end-funds.asp
    ... Embedded Options; 14.8 Institutional Investors and Financing Purchases; 14.9
    Interest Rate Risk; 14.10 Call and Prepayment Risk; 14.11 ...

  • The Rise Of The Hedged Mutual Fund

    http://www.investopedia.com/articles/mutualfund/07/hedge_funds.asp
    ... Two and A Brief History Of The Hedge Fund.) With this relatively new mutual fund ...
    of such funds over the past 10 years is a result of investors' ongoing desire ...

  • An Introduction To Closed-End Mutual Funds

    http://www.investopedia.com/articles/mutualfund/07/closed_end_funds.asp
    ... On the other hand, closed-end mutual funds, which generally provide more income
    to investors, issue all of ... instead of issuing and redeeming new shares everyday ...

  • 4 Alternatives To Traditional Mutual Funds

    http://www.investopedia.com/articles/mutualfund/10/open-ended-mutual-fund-alternatives.asp
    ... investors. Once all of the shares are sold, the fund is closed to new investors
    and the shares begin trading in the secondary market. ...

  • Hedge Funds Go Retail

    http://www.investopedia.com/articles/mutualfund/07/mutual_fund_retail.asp
    ... 10 and 40 underlying hedge funds, most of which are of the standard, unregistered
    kind, and many of which have been closed to new investors for many years. ...

  • Hedge Fund Mojo For A Sinking Portfolio

    http://stocks.investopedia.com/stock-analysis/2008/Hedge_Fund_Mojo_For_A_Sinking_Portfolio.aspx
    ... Year-to-date, the fund is down 5.45%. According to Morningstar.com DIAMX is currently
    closed to new investors, but it may reopen in the future. ...

  • Mutual Fund Asset Size | Investopedia

    http://www.investopedia.com/university/quality-mutual-fund/chp5-fund-size
    ... existing fund shareholders can continue to put new money in ... What this means for
    investors, as well as investment ... that in 2005, 32 of the 71 funds were closed. ...

  • Mutual Fund Asset Size | Investopedia

    http://www.investopedia.com/university/quality-mutual-fund/chp5-fund-size/
    ... existing fund shareholders can continue to put new money in ... What this means for
    investors, as well as investment ... that in 2005, 32 of the 71 funds were closed. ...

  • Mutual Fund Asset Size | Investopedia

    http://www.investopedia.com/university/quality-mutual-fund/chp5-fund-size/default.asp
    ... existing fund shareholders can continue to put new money in ... What this means for
    investors, as well as investment ... that in 2005, 32 of the 71 funds were closed. ...

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