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Fund Times

Vanguard Reopens Capital Opportunity to Individuals

Fund run by the topnotch Primecap team is still closed to institutions and intermediaries.

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Vanguard announced on Wednesday morning, April 3, that it is reopening the $8.7 billion  Vanguard Capital Opportunity (VHCOX) to individual investors and removing the $25,000 annual limit on additional purchases. The fund has been closed to all new investors since March 2004, but the board of directors has decided to allow new "personal investors" to have access to the fund, which has seen $2.6 billion in net outflows over the past three years. However, it will remain closed to all financial advisory, institutional, and intermediary clients, other than those who invest through a Vanguard brokerage account.

Vanguard Capital Opportunity has been managed since 1998 by the Primecap team, which has compiled one of the fund industry's best track records over the past 30 years with  Vanguard Primecap (VPMCX). (Since late 2004 it has also managed  Vanguard Primecap Core (VPCCX),  Primecap Odyssey Growth (POGRX),  Primecap Odyssey Stock (POSKX), and  Primecap Odyssey Aggressive Growth (POAGX).) Its contrarian growth strategy has also worked very well for Vanguard Capital Opportunity, whose 10-year returns rank in the top 1% of the large-growth category, but it has also made the fund prone to spells of short-term underperformance.

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David Kathman has a position in the following securities mentioned above: VPMCX. Find out about Morningstar’s editorial policies.