What a difference a couple of months makes. In May, Gabelli Asset Management had decided to close down its small cap growth fund (GABSX) starting in October. Now, the firm has reversed that decision and decided to keep the fund open to new investors, Bruce Alpert, chief operating officer with the firm, told the MutualFundWire.com.

"The market conditions in May were such that monies were moving into small cap. We felt at that time that over the summer that trend would continue. It would have been difficult for us to maintain the discipline of the fund if that trend had continued," he reported.

"However, cash flows throughout the industry have slowed considerably in the past few weeks. There is also a far greater supply of small cap companies at quality prices than there were in May," he continued.

The firm is undecided as to whether or not it will initiate new marketing or ad campaigns for the fund.

Gabelli's situation may point to an interesting development -- and, therefore, opportunity -- for some mutual fund firms. If assets in certain funds are down due to market conditions, then firms are in a position to reopen potentially popular funds that have been closed to new investments. This means players in the industry have the opportunity to push "new" products without the expense of actually having to set up new products. Investors are definitely skittish right now, but a well-known product with a strong earnings history might just entice a few back into the fold. 

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