T. Rowe Shuts Doors at Small-Cap Value Fund

May 24, 2002 (PLANSPONSOR.com) - Things have gotten a bit too hefty at the $2.9-billion T. Rowe Price Small-Cap Value fund, so officials of the Baltimore investment management company have temporarily closed the fund's doors to new investors.

The move is effective immediately.

Net cash flows into the Small-Cap Value Fund were $346 million in 2001 and $527 million in the first four months of 2002. The fund had a total return of 26% for the one-year period ending April 30, 2002, T. Rowe Price said.

Operating the fund at its current size would make it to difficult to operate under its value orientation, the company said.

The fund, which began operation in June 1988, invests primarily in stocks of small companies that the manager believes are undervalued.

The Small-Cap Value Fund last closed to investors on March 1, 1996 for similar reasons and reopened on November 5, 1998. Prior to that, the fund also closed on March 4, 1993 and reopened January 31, 1995.

Other firms are also having to close their small cap funds. Just two weeks ago Evergreen Investments became the latest fund company to close off a small cap value offering – having announced that it will close the Evergreen Small Cap Value Fund to new investors when the Fund reaches $900 million in assets. It’s currently at $794 million, according to the firm.

And earlier in the month, the following funds also announced plans to close:

  • the $17.2 billion Fidelity Low-Priced Stock fund, and
  • the $1.3 billion Oakmark International Small Cap fund

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Read more at Small Caps Still Muscle the Market .