Morningstar Discusses Good, Bad Reasons for Fund Closures

In a recent interview Morningstar’s director of manager research Russ Kinnel discussed the types of funds most likely to stop accepting new investors in 2021, the reasons why funds may close to new investors, and trends in these closings. Kinnel noted that it can be good news when a fund decides to close off to new investors. “One, it means they’re trying to maintain the strategy that brought it success in the first place. And two, it means they’re shareholder oriented, because this is one of those places where a fund is really choosing between their short-term profits, and the investor’s best interest.”