T. Rowe Price is closing its U.S. capital appreciation strategy to new investors, said spokeswoman Heather McDonold.
The strategy, which launched in 1986, had $20.3 billion in mutual fund assets and $10.9 billion in separate accounts, a collective investment trust and subadvised assets, as of March 31. Existing investors will be able to make additional investments.
For institutional investors, the strategy has been capacity constrained since October 2013, Ms. McDonold said.
The strategy typically invests about 60% of its assets in equities and 40% in fixed income and cash reserves. The reason for the closing is “to maintain the integrity of the fund's investment strategy and to protect the interests of existing shareholders,” a T. Rowe Price news release said.
“The market has experienced a significant rally over the past five years and the Capital Appreciation Fund's assets have risen considerably, due to both market appreciation and inflows,” said David Giroux, the strategy's portfolio manager, in the news release. “If flows were to continue at this pace, it could eventually strain our ability to invest efficiently and result in a less-effective investment strategy. We are committed to investing in a manner consistent with the fund's objectives.”
