AIM Management Group announced today that its Small Cap Growth Fund has reopened to new investors since closing November 1999.
The move is an effort to take advantage of declining market caps that AIM says will give portfolio managers a chance to invest in "already-proven companies," said David Matheson, a company spokesman.
In addition, small cap stocks have recently outperformed their large cap counterparts, he said. And as rate cuts spawned by the Fed have nudged the U.S. economy toward what AIM sees as a recovery period, demand has increased for the small cap product, Matheson said.
AIM's small cap growth product was shuttered to new investors nearly two years ago after portfolio managers decided exceeding its size, which at the time was $500 million, would compromise liquidity and "flexibility," Matheson said. "They believed it was the appropriate size in the interest of shareholders," he said.
But since, the fund has grown to approximately $759 million in assets as of June 30. So has AIMs current reasoning regarding the demand for small cap stock products and their recent performance trumped the companys desire to keep the fund at an "appropriate size"?
"I don't have an answer for you," Matheson said. "I'd have to do some checking on that."
Today's announcement follows the closing of five AIM funds this month including; Latin American Growth, Global Consumer Products & Services, Tax Exempt Bond Fund of Connecticut, Advisor Flex and Japan Growth funds. All of the funds were closed and will be merged with other funds.