Dodge & Cox to Close Hot Fund

San Francisco-based Dodge & Cox Funds said Monday that it would close its “balanced” mutual fund to new investors Sept. 10.

Dodge & Cox, which manages just four mutual funds in all, has generated strong returns for its investors in recent years by following a “value” investing style. In turn, the performance of its funds has attracted a torrent of new money.

The company closed its Dodge & Cox Stock fund to new investors in January, citing heavy cash inflows.

In a statement Monday, the firm said it was seeking “to slow asset growth further” by closing Dodge & Cox Balanced fund to new investors.

Dodge & Cox Balanced, which invests in a mix of stocks and bonds, had total assets of $17.3 billion as of June 30.

The fund is up 2.4% this year. By contrast, the average fund in its category -- so-called moderate-allocation funds, as tracked by Morningstar Inc. in Chicago -- is up 0.3%.

The Dodge & Cox Stock fund, which had $36.3 billion in assets as of June 30, is up 2.3% this year, compared with a gain of about 1.8% for the average “large value” fund, according to Morningstar.

Dodge & Cox ranks fifth this year in cash inflows among mutual fund families: The firm took in $11.2 billion in net new cash to its funds in the first seven months of the year, according to data tracker Financial Research Corp. in Boston.

Heavy cash inflows can complicate portfolio management if a fund manager is having a hard time finding attractive investments.

In its statement Monday, Dodge & Cox hinted that although it has been able to handle cash inflows so far, that might not be the case if it were to leave the balanced fund open to new money.

“We have been able to accommodate cash inflows in an orderly way, and we remain confident in our ability to find attractive investment opportunities with the assets that have been entrusted to us,” the firm said.

The Dodge & Cox International and Dodge & Cox Income funds remain open to new investors, the firm said.

Separately on Monday, the Investment Company Institute said stock mutual funds overall took in $9.5 billion in net new cash in July, down from a $10.4-billion inflow in June.

Bond funds had a net outflow of $1.22 billion in July compared with an outflow of $7.6 billion in June, according to the institute, the mutual fund industry’s chief trade group.

Money market funds had a net outflow of $2.4 billion last month compared with an outflow of $21.9 billion in June.

Net cash flows measure new purchases minus redemptions.