Vanguard restricts investments in Primecap Core Fund

The Vanguard Group Inc. has restricted investments in its Primecap Core Fund to high-net-worth clients.
AUG 14, 2009
The Vanguard Group Inc. has restricted investments in its Primecap Core Fund to high-net-worth clients. Vanguard Flagship Services’ clients who have at least $1 million invested with the firm can invest in the fund without limit, but it is closed to financial advisers and institutional clients. The Malvern, Pa.-based firm will permit shareholders and participants in retirement accounts to continue to invest in the fund. However, shareholders are limited to investing $25,000 annually into the Primecap Core Fund (VPCCX), which has $3.8 billion in assets under management. The Primecap Core Fund is the second Vanguard fund to be closed to new investors in the past few months. Vanguard stopped accepting new accounts, and restricted additional investments, in its Convertible Securities Fund (VCVSX) in June. “We are taking pre-emptive steps to limit the growth of Primecap Core Fund and its sister funds, with the goal of enabling the team at Primecap Management to continue to implement their investment strategy in an effective manner,” Vanguard chief executive Bill McNabb said in a statement. Based in Pasadena, Calif., Primecap Management, which has served as an investment adviser to Vanguard since 1984, manages $37 billion in Vanguard investment products. Vanguard manages more than $1.2 trillion in U.S. mutual funds assets, including $490 billion in retirement assets.

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