Vanguard Asset Management has soft-closed two of its popular US equity funds to new investors.
The Vanguard US Discoveries and US Opportunities funds have been closed to all new accounts, although existing shareholders may still add to their holdings.
The group has acted following a sharp jump in AUM for both, with the Discoveries fund growing from $25m at the end of 2012 to more than $160m by 31 December 2013, and the Opportunities fund moving from $850m to $1.8bn.
Both funds focus predominantly on mid-and-small-cap names in the US market, prompting Vanguard to shut the funds to new money to preserve the investment mandate.
Vanguard’s Europe managing director Thomas Rampulla 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.
“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.”
Both funds have outperformed thier sector averages in recent years. The Discoveries fund returned 85.4% over the three years to 27 February 2014, compared to a sector average of 48.1%, according to FE, while the Opportunities fund returned 79.68%, compared to a sector average of 38.01%.
Vanguard added it will continue to monitor the cash flow of both funds. Should the conditions of the funds change, it said it may take steps to reopen or close the funds in the future to new investment.
