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Vanguard closes convertible securities fund to new accounts

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Vanguard has closed the Vanguard Convertible Securities Fund to new accounts and placed a USD25,000 annual investment limit on current retail accounts.

‘The board of directors regularly monitors cash flow into Vanguard’s funds and takes action when assets reach levels that could impede advisers’ ability to implement their investment strategies effectively,’ says Bill McNabb, Vanguard’s chief executive. ‘We believe that the Convertible Securities Fund closure is prudent in light of strong recent cash flow, coupled with a limited supply of new issuance in the US convertibles market.’

In the past five months, the fund’s assets have nearly doubled, rising from USD867m to USD1.5bn through a combination of net cash flow and market appreciation.

The decision to close the fund was made in consultation with the fund’s investment adviser, Oaktree Capital Management of Los Angeles. Oaktree has managed the fund since 1996.

Five other Vanguard funds are currently closed: Vanguard PrimeCap Fund, Vanguard Capital Opportunity Fund, Vanguard Admiral Treasury Money Market Fund, Vanguard Treasury Money Market Fund, and Vanguard Federal Money Market Fund.

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