On the heels of Fidelity's announcement that it would close Contrafund, the Boston behemoth says it's going to close two more of its (bloated) funds: Fidelity Growth Company and Fidelity Mid-Cap. Now let me repeat--it's a really good thing when a fund company closes a fund. Sure, it seems that Fidelity closes these babies a bit late. But hey, better late than never, right?
That got me to thinking. What other funds should be closed to new investors? So I used the handy-dandy Morningstar fund screener to see check out the biggest funds around. Obviously index funds like the Vanguard 500 fund get a pass. Still, there are plenty of whales out there that I think need to be closed.
Frankly, I think many of the American Funds have put on too much weight. Growth Fund of America has more than $141 billion assets. The folks at American Funds would say that their multi-manager approach means they can run huge pools of assets. But come on, how long can you use that excuse. But hey, they have continued to defy odds--producing returns above its peers of 4 to 8 percentage points in each of the past three calendar years. But if i had a wish list of funds I'd like to close, GFA would be on the top. (Of course, I'd also include other American faves like Investment Company of America, EuroPacific Growth, and a number of other biggies in their lineup)
Just so it doesn't seem like I'm picking on the American Funds, which i really do think is a shareholder-friendly fund company, I'd also include Davis NY Venture. The guys at Davis run a really stellar shop. But between this flagship fund and a number of other portfolios they're running, I have to wonder whether or not they can handle all that money in the future.
Are there funds out there that you wished were closed to new investors?