Russel Kinnel, director of manager research at Morningstar Inc., Chicago, which tracks 620,000 investment offerings. Morningstar.com
Many investors race to jump into hot mutual funds before they close—but the smarter move may be buying into these funds once they reopen. Thanks to the bear market and outflows of more than $900 billion from actively managed funds in 2022, more than a dozen highly regarded funds are open for business again.
Buying into reopened funds is a good idea provided they have experienced management, consistent strategies and solid long-term records. Funds typically start accepting new cash because the managers are finding attractive opportunities. There’s still plenty of risk this year, and reopenings are not a perfect timing signal, but long-term investors may want to start positioning for the next bull market in funds they couldn’t get into during the last one.
Growth stocks and small- and mid-cap stocks have had a tough time, so it’s not surprising that many reopened funds focus on these areas. Attractive no-load funds that have reopened…
PrimeCap Odyssey Aggressive Growth (POAGX), closed for nearly nine years, keeps 60% of assets in fast-growing small- and mid-cap stocks focusing on health-care and technology. Performance: 13.25%.*
T. Rowe Price Mid-Cap Growth (RPMGX). Manager Brian Berghius has navigated this fund for 30 years. His valuation-conscious approach keeps this fund less volatile than many of its peers. Performance: 12.07%.
Wasatch Core Growth (WGROX) is one of six funds reopened by small-cap specialist Wasatch Global Advisors. Manager J.B. Taylor, who has a great track record, looks for well-run companies that can double earnings in five years’ time. Performance: 12.15%.
*Performance figures are for 10 years annualized through February 13, 2023.