Although using predetermined closing dates to create a sense of urgency among potential investors is an effective method of attracting assets, it is a disingenuous marketing scheme that can alienate investors and advisors, according to industry analysts and executives.

While some funds close once they reach a certain asset level, most funds close on a predetermined date, said Dennis Dolego, director of research for the Optima Group of Fairfield, Conn., a mutual fund distribution consulting company. Under the predetermined date arrangement, a fund will be opened, gather assets and develop a strong performance reputation and then close to new investors for a short period, Dolego said. Very often the fund will then reopen for a predetermined amount of time, he said.

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