Fidelity Contrafund and Fidelity Low-Priced Stock fund are the latest in a string of high-profile but previously off-limits funds that have reopened to new investors this year. Fidelity said the funds, which have been closed since April 2006 and December 2003, respectively, are re-opening Dec. 16 to offset the onslaught of investors leaving the funds as they retire.
Good funds typically close their doors to new investors to avoid asset bloat. Too much money in a fund makes it hard for a manager to nimbly move in and out of positions. Re-openings replenish assets and give managers more leeway to go bargain hunting for cheap stocks.
Other big names that have reopened this year include Dodge & Cox Stock, Vanguard Explorer, Sequoia Fund, Longleaf Partners, and Fidelity Magellan.
Even though these are all big-brand names, be sure to put them under the microscope before investing.