Vanguard High-Yield Corporate Fund closes to new investors

[veremchuka]

https://personal.vanguard.com/us/insights/article/fund-announcement-05242012?SYND=RSS&Channel=AN

 

[FIREd]

Here is Vanguard's explanation for closing this fund to new investors:

Due to a sharp increase in cash flow into Vanguard High-Yield Corporate Fund—more than $2 billion in the last six months alone—we've closed the fund to most new investors.

While issuance of high-yield securities remains strong (the first quarter of 2012 saw the highest amount on record), we remain sensitive to the potential liquidity challenges that can arise in the market. Because of this potential, we've determined that limiting cash flow into the fund is in the best interest of its existing investors. This move will help the fund's advisor, Wellington Management Company, continue to execute its high-quality approach to high-yield investing.

 

[foxfirev5]

This sounds reasonable to me. With many people chasing yields VG would have challenges in finding sufficient new investments. While never a leader in junk funds I like the slightly better risk profile of this fund.