Fast-Growing Fund to Close to New Investors
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RS Emerging Growth Fund, a small-capitalization growth mutual fund whose assets have exploded after a run of stellar performance, will close to most new investors April 28, its advisor, RS Investment Management, said Friday.
Emerging Growth, run by Jim Callinan, Morningstar Inc.’s 1999 domestic stock fund manager of the year, posted a total return of 183% in 1999. The fund has about $6.8 billion in assets.
Callinan, who began managing the fund in July 1996, has posted annualized returns there of 64.3% through February, Morningstar said. That compares with a 27.7% return for the average small-cap growth fund.
Fund closures are not unusual, but the six-week window is.
“Some families give no notice at all to investors, and I think that’s the way to do it,” said Morningstar analyst Russell Kinnel.
The window leaves open the possibility that cash inflows will even accelerate, and that, Kinnel said, can force fund managers to change how they invest.
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