The Vanguard Group, the US-listed money management firm, is closing its Vanguard Capital Value Fund to new investors, partly to protect existing shareholders from performance-chasing newcomers, who may increase transaction costs.

The $742 million fund has more tripled in size this year as a result of market appreciation and strong inflows. It will close to new shareholder accounts immediately for a "cooling off" period, the asset manager said in a statement last week. Existing shareholders may continue to invest in the fund.

"Despite our efforts - at both a company and an industry level - to educate investors about the perils of performance-chasing, we continue to be concerned about this behavior," Vanguard Chief Executive Bill McNabb.

A cooling-off period serves two purposes, he said - protecting existing shareholders from higher transaction costs that can result from short-term investors moving in and out and protecting prospective investors from themselves, as high-performing funds like this one will almost certainly drop off at some point.