Some mutual funds on Fidelity like FDGRX are being listed as “Closed to new investors.” Why is that?
There are some mutual funds that are just no longer accepting new investors. Those specific funds can’t be bought in further unless changes occur that will permit them to start accepting new money or investments into it again.
When a mutual fund performs well, many new investors are willing to purchase shares. When the fund grows too fast, the fund manager may be unable to invest all of the assets, which may hinder the fund’s objectives.
By deciding to close a mutual fund and stabilize cash flows, the fund manager can help maintain fund performance for existing shareholders more easily.
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