Baltimore-based investment firm T. Rowe Price closed one of its biggest mutual funds to new investors Monday, saying it is concerned about keeping pace with its rapid rate of growth.
The Capital Appreciation Fund, which invests about 60 percent in stocks and the rest in bonds and cash, jumped from $13.6 billion in 2012 to $19.1 billion in 2013, according to the firm's 2013 annual report. The fund, which has posted positive returns in every year but two since its 1986 start, had $20.4 billion in assets at the end of March.
"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," portfolio manager David Giroux said in a statement. "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."
T. Rowe limited similar portfolios available to institutional investors last October, spokeswoman Heather McDonold said. Those portfolios are also closed to new clients as of market close Monday, the firm said in its announcement.
T. Rowe's U.S. Capital Appreciation Strategy represented $32.3 billion of its $711.4 billion in assets under management at the end of March, according to a press release. The fund will continue to accept investments from existing shareholders, as well as direct rollovers from qualified retirement plans into new T. Rowe Price IRAs.Copyright © 2015, The Baltimore Sun