Course 409: Chasing Closing Funds
Wait. And Other Helpful Hints
In this course
1 Introduction
2 Performance May Take a Hit
3 ...and Taxes Can Make It Worse
4 Is Closing Bad, Then?
5 Wait. And Other Helpful Hints

Many of the funds that have closed at some point in the past 20 years have later reopened. Fidelity Low-Priced Stock FLPSX has closed a few times, or restricted purchase to certain investors, but then reopened at a later date. The same hot money that forces sizzling funds to shut sometimes flees the fund when performance cools, leading funds to reopen their doors. In fact, reopening might be a sign that an asset class is being overlooked and is worth a second look.

Besides watching for reopened funds, keep an eye out for new funds that promise to close at a point when they still have reasonably sized asset bases. But you still need to make sure that it has all the basics of a good fund: strong management, a good strategy, and low costs. If it doesn't, take a pass. There are thousands of open funds, and at least a few ought to meet your needs.

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