The ranks of small and midcap value funds open to new investors continues to diminish. The latest fund to close its doors to new investors is the Dreyfus Midcap Value Fund. The fund will remain open to participants in 401(k) plans offering the fund.

Value funds are one of the few bright spots in a dreary market for asset gathers, yet fund firms face the dilemma of little capacity to sell the product or create new ones, explains Geoff Bobroff, an industry consultant.

Many fund firms are responding by closing funds to protect performance even at the cost of turning off the spigots of top selling products. By closing funds, though, the firms risk losing an opportunity to grow market share in the current take-away market.

The fund is closing with $1.4 billion in assets, which was a target previously announced by Dreyfus last March. Since that time the fund has grown by $800 million in assets.

"The rapid growth of the Dreyfus Midcap Value Fund reflects the fund's strong performance and accelerating cash inflows," said Stephen E. Canter, Dreyfus chairman and chief executive officer, in a statement. "However, it is our responsibility to manage this fund in the best interest of our current shareholders. Closing the fund to new investors will ensure that the portfolio managers retain the agility to strategically move assets in and out of investment opportunities." 

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