Why Do Funds Soft Close?

Polar Capital Global Technology is the latest fund to "soft close". But how does a soft close work, why do fund firms do it, and what does it mean for investors?

James Gard 6 July, 2020 | 11:42AM

Nightclub bouncer and VIP rope

What happens when a fund becomes too popular? One way fund companies can curb demand for a hot fund is to “soft close”, which means it's technically still open but far less appealing to new investors.

Polar Capital Global Technology fund, which has a Morningstar Analyst Rating of Silver, is one such fund that has attracted strong investor interest this year as tech stocks have soared during the coronavirus crisis. The fund, which is up more than 30% so far this year, has seen its assets under management swell from £2.68 billion a year ago to a massive £4.5 billion today. 

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About Author

James Gard  is content editor for Morningstar.co.uk

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