MFS closed its international all-cap value strategy to existing and prospective clients last month.
The international strategy had $27.87 billion in assets at year-end. It gained $5.69 billion in 2014.
Carol Geremia, president of the firm's institutional advisory subsidiary, MFS Institutional Advisors Inc., and co-head of global distribution, said MFS officials fear too much money in one strategy can limit the portfolio manager's ability to be flexible and nimble.
“As we've grown, we've been very diligent in putting (on) soft and hard closes to protect performance,” Ms. Geremia said.
Boston-based MFS also closed its $7.77 billion global large-cap value strategy to new clients last month after gaining $1 billion in assets in 2014.
In January, Dodge & Cox, San Francisco, closed its $64.1 billion international equity mutual fund to new investors. The fund had net inflows of $10.45 billion in 2014.
“The soft close is designed to proactively "tap the brakes' on the fund's growth,” said a statement on the firm's website. “We believe this decision is in the best long-term interests of the fund's existing shareholders, as it allows us to have stable and balanced growth within the fund.”
Steve Gorski, vice president and head of sales at Dodge & Cox, wouldn't comment, referring to the statement on the website.
Data from eVestment LLC, Marietta, Ga., show Dodge & Cox's international equity fund returned 26.31% for the year ended Dec. 31, vs. 22.78% for its benchmark, the MSCI EAFE index.
Its five-year annualized return was 16.58%, vs. 12.44% for the benchmark. Its 10-year annualized return was 9.76%, vs. 6.91% for its benchmark.
Dodge & Cox had $270 billion in assets under management as of Dec. 31, a record high.
Adrian Kurniadjaja, senior consultant, global equity, at Aon Hewitt Investment Consulting, Chicago, said closing strategies as they near capacity is “certainly not an odd move,” but “it's not something everyone does.”
“It's done to protect existing investors,” Mr. Kurniadjaja added.
Jeb B. Doggett, a partner at Casey Quirk & Co. LLC, Darien, Conn., said, “Managing capacity is something that's important to existing clients.
“We've certainly seen some large global and international funds out there, so capacity does become an issue. Some firms are more aggressive about closing early than others.”
Mr. Doggett said now that more money is going to fewer managers, and more money is going into global and international strategies, more firms are seeing these strategies reach capacity.
Higher returns mean there is more money to manage, he said. “We see continued demand in particular for global and international strategies, which potentially puts pressure” to close them.
MFS had $431 billion in assets as of Dec. 31, of which $157 billion was institutional.