T. Rowe Price Small-Cap Stock Fund reopening to new investors

TheShadow

https://www.sec.gov/Archives/edgar/data/75170/000199937125011635/trowe-497_081925.htm

497 1 trowe-497_081925.htm DEFINITIVE MATERIALS UNDER RULE 497

T. Rowe Price Institutional Small-Cap Stock Fund
T. Rowe Price Small-Cap Stock Fund

Supplement to Prospectuses and Summary Prospectuses dated March 1, 2025

Effective September 30, 2025, the funds will resume accepting new accounts and purchases from most investors who invest directly with T. Rowe Price.

Accordingly, effective September 30, 2025, the first sentence under “Purchase and Sale of Fund Shares” in each summary prospectus and Section 1 of each prospectus is deleted in its entirety. In addition, the section entitled “Closed to New Investors” in Section 2 of each prospectus is deleted in its entirety.

The date of this supplement is August 19, 2025.
G68-041 8/19/25

Mark

I'm always curious when fund companies reopen closed funds. They rarely if ever provide a reason for that decision. Knowing that do you think that they do so because of large outflows, or because of market investing sentiment changes that will make the fund more enticing, or because they have new exciting positions they'd like to add or possibly a combination of all of those? Or maybe something entirely different. What are your thoughts?

TheShadow

From a T Rowe Price email I received this afternoon:




Dear Investor,

We are writing to inform you that effective September 30, 2025, we are removing the purchase restrictions on the T. Rowe Price Small-Cap Stock Fund. This change will now allow investors who trade directly with T. Rowe Price to open new accounts in the funds.

The fund had been restricted for all investors due to concerns that significant cash flows could make it difficult to identify securities that fit our investment process. Market conditions have changed and after a thorough review of net inflows and other factors related to the strategy’s capacity, we believe that we can accommodate controlled asset growth over time.

We value your continued business and partnership. If you have any questions about this change, feel free to reach out to us.

equalizer

The T. Rowe Price Small-Cap Stock Fund (OTCFX) closed to most new investors on January 2, 2014.

At the time of the closure, the fund had experienced a significant increase in assets under management. As the fund becomes larger, it becomes more difficult for portfolio managers to invest in smaller companies without significantly impacting the stock prices of those companies.

But Small Cap Value has been open for many years. Maybe assets weren’t growing so fast in the small cap value fund?

It may have been closed to new investors in 2013-2016 time period.

DrVenture

I owned OTCFX, in taxable and tax-deferred, for a couple decades. I sold it a few years ago when it started to underperform. I am assuming that a lot of investors did same.

Despite talk of a resurgence in small caps lately, the fund is only up 3% YTD. I did not buy it to diversify, rather to beat the S&P. Both 2023 & 2024 were underwhelming, as well. Though. by then I had sold.