Funds Closing -- a Good Sign, Oddly Enough

Here we find ourselves, waiting for the end of this miserable recession. It has taken away jobs and shut down businesses, and it has significantly shrunk our brokerage accounts. Ouch.

There have been benefits to the recession, though. For one thing, Americans are saving more than they have in recent years. And many good mutual funds have reopened during the recession. Having lost lots of value and many asset dollars, fund managers found themselves looking at lots of exciting values in our post-implosion stock market and sought new dollars to invest in them.

From one viewpoint, we might then be a little sad that the trend toward funds' reopening appears to be reversing itself. But it's actually a good thing.

Slam!
First off, a mutual fund shutting its doors to new investors is a boon for the fund's shareholders because it suggests that the money managers are choosing to focus on their best ideas instead of taking in as much money as they can and finding both great and less-great places in which to invest it.

For example, the Artisan Midcap Value (ARTQX) fund, sporting market-beating three-year and five-year average annual returns, has just closed to new investors. Meanwhile, the Vanguard Primecap Core (VPCCX) fund has now restricted new investments to customers with at least $1 million invested with Vanguard.

Now think for a moment about why such funds would close. It's because they've done well, and thereby have attracted lots of investor dollars. And they've done well by investing in many winners. Here are some recent top holdings of the above funds, including their star ratings from our Motley Fool CAPS investor community:

Data: Motley Fool CAPS, Morningstar.

What to do
So stop putting off investing in those great mutual funds that interest you -- because the best among them may suddenly shut their doors.

Learn more about the best way to invest today:

• The Next Incredible Buying Opportunity
• The 3-Step Plan to Restore Your Retirement
• I Turned $3,000 Into $210,000