Vanguard earned mostly praise recently for its decision to close the Dividend Growth Fund (MUTF:VDIGX) at the end of July. The reason given is the one that investment companies often give when closing a fund. The fund's advisor wants to be able to continue producing above average returns and a rapid influx of cash hinders its ability to do so.
Behind closed doors, Wellington Management, the company that manages the fund, would likely give two reasons for closing the fund. Publicly, they'll say assets are growing too fast to manage. Vanguard said that $3 billion in flows has come into the $30 billion fund over the past three months while overall assets have doubled over the past three years. Privately, they'd probably admit that they don't like the market they're investing in and want to take preventative measures before new investors potentially get clubbed.
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