How big is too big for a small-cap fund?

How big is too big?

Natalie Kenway takes a closer look at fund capacity challenges in the small-cap sector, and at what point buyers think a portfolio should be capped.

As a number of popular funds in the small-cap space reopen to new investment, the debate about capacity in these types of portfolios has come to the fore once again. Fund buyers are still flocking to a handful of favoured funds as buy lists become ever more concentrated, and this is in turn contributing to a domino effect of funds soft-closing and then reopening. Over the past five years, small-cap funds in the UK have had a fantastic run, with the FTSE Small Cap index returning over 90% during that time, despite a challenging 2014.  Fidelity and Schroders were among providers whic...