HOW FUNDS CLOSE THE THREE WAYS
‘Hard close’: This is literally closing a fund to any new investments. It is quite rare. Some funds that have “hard closed” will have a waiting list for investors, so when someone sells they can buy.
‘Soft close’: The fund is closed to new investors, but existing investors can continue to add new money. Often platforms or fund shops are considered existing investors, so their customers can still invest. Mr Burdett said: “The fund may still grow but in a controlled manner, but it can be very hard to maintain a soft close.”
Some funds raise their charges to serve as a further deterrent.
‘Soft soft close’: Often used by larger groups, which don’t have a set policy on closing. It means cutting back any marketing and advertising. Investors can still put money in the fund.