Why mutual funds stop new investments?
Monday, March 20, 2017, 7:23 PM
If fund manager cannot find sufficient investment opportunities, investments are restricted in the mutual fund. This usually happens in small and mid cap funds. This move protects existing investors. If the fund manager allows new investments to pour in, he would have to buy holdings at high valuations. This could cause losses to existing investors in case of crash in small and mid-cap stocks.