Citing its track record of preemptively closing mutual funds before current investors become harmed,
After consulting the two funds investment advisor, Pasadena, Calif.-based Primecap Management Co., the company said Vanguard Primecap Fund and Vanguard Capital Opportunity Fund will only be purchasable by current shareholders, and only at an amount up to $25,000 annually.
The two were among Vanguards best in 2003, as Vanguard Primecap returned 36% and Vanguard Capital Opportunity produced a 48% gain.
Vanguard Chairman John J. Brennan said the pre-emptive move is based on that success, and the possibility that inflows will rise substantially within the funds. "Our responsibility lies with the funds current clients, so we are taking these steps to preserve Primecap Managements ability to employ its distinct investment strategy and pursue competitive long-term returns going forward," Brennan said.
This is the third time that Valley Forge, Pa.-based Vanguard, the nations second-largest fund company, has closed the Primecap fund and the second time it has closed the Capital Opportunity Fund. Vanguards Precious Metals Fund and Global Equity Fund are also currently closed.
