Vanguard Group has closed its largest fund, the Vanguard Strategic Equity Fund, to new investors and raised the minimum investment rate on two others. The Valley Forge, Pa.-based complex said Strategic Equity's assets under management had swollen to $7 billion. By capping the fund, Vanguard brings the number of closed funds at its shop to seven. The minimum investment requirement on the $41 billion Vanguard Wellington Fund and the $44 billion Vanguard Windsor II Fund was raised from $3,000 to $10,000. "We will continue to employ these types of cash-flow management measures when we believe they are in the best interests of the funds' existing shareholders," said Vanguard CEO John J. Brennan, in a statement. Sonya Morris, an analyst with Chicago based fund tracker Morningstar, told Dow Jones that the restrictions were "a good move" and added that Vanguard was "starting to test the limits with the Wellington and Windsor II funds." Fund firms typically place restrictions on new investment in funds when they become too big because they fear it will impact performance. In other Vanguard news last week, the firm announced that it would commence subscription for the new Vanguard Strategic Small-Cap Equity Fund. The fund will use quantitative analysis to invest in stocks in the Morgan Stanley Capital International U.S. Small Cap 1750 Index. It is the second actively managed product for Vanguard's quantitative unit and carries a $3,000 minimum investment and an anticipated expense ratio of 0.40%.

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