Invesco recently announced that this fund would be closed to new investors effective October 8. It is a “soft cap”, meaning that those investors who already held the fund could add to their holdings. While it is unfortunate that one of the best small cap funds in the country is being capped, it really is in the best interest of the current investors for them to do so.
The managers run a very concentrated, high conviction portfolio that is made up of the managers’ best 25 to 40 ideas. They are disciplined in their approach and will not make any investment that does not meet their strict quality and valuation criteria. This can result in significant cash balances, which at the end of September sat at more than 30%.
If you hold this fund and it is appropriate for your portfolio, I would continue to do so. However, if you are looking for an alternative high quality Canadian small cap offering, you will have to look elsewhere. The IA Clarington Canadian Small Cap (or the other QV man-aged funds CI Can-Am Small Cap, or NEI Ethical Special Equity), or the Sentry Small Mid Cap Income Fund would be my picks.