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Great Funds Closing Their Doors

Last update on: Jun 18 2020
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Over the years we successfully found great funds early and let them deliver strong profits for us. One of the disadvantages is that after we discover them, the shareholder-friendly funds we favor deliver excellent performance and attract a lot of dollars. Because they are shareholder-friendly, they tend to close their doors to new investors when success brings in more cash than they can invest. At other times, our funds have been purchased by larger fund families, which imposed sales loads on new investors.

Some favorites we’ve lost to the load world are the Mutual Series funds and Acorn funds. These still are great funds for “legacy investors” who can purchase them without a load. I still have some Mutual Series funds in my portfolio. If it were available without a load, Mutual Shares would be in our Alternatives Portfolio.

Some of our current recommended funds now are closed to new investors. I found alternatives to those funds for new investors.

Third Avenue International Value was the latest to shun new investors. Investors who did not get in before the door closed should consider Artisan International Value and Artisan International. International Value is more like the Third Avenue fund and has better returns than International, but it has been around only about three years. International has the longer track record.

T. Rowe Price Small Stock fund also is closed, as are many small stock funds. Heartland Value and Heartland Select Value are good alternatives while they are open, though they are more volatile than the Price fund. Baron Asset also is a good substitute though it has more of a growth emphasis than the Heartland funds.

Tweedy, Browne Global Value recently closed to new investors. Fidelity Diversified International is a good substitute. Also good is Oakmark International, which is a no transaction fee fund in most of the discount broker programs.

The mutual funds industry is full of change and will continue to be. The lesson to learn is to buy a fund when I recommend it, while you still can.

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