Franklin Templeton Closes Doors on Hot Biotech Fund

As one door closes, another one opens.

On Thursday Franklin Templeton is again shuttering the hot (FBDIX Quote) Franklin Biotechnology Discovery fund. Separately, on Friday T. Rowe Price will launch its Emerging Europe & Mediterranean fund.

Franklin's biotech fund, which held $1.3 billion on July 31, reopened to new investors only on July 17. Stocks of biotechnology shops -- high-tech firms that primarily develop new drugs -- have been on a tear, helping the fund to boffo returns. Over the past year it's up 181%, beating 90% of its health care fund peers, according to Morningstar. Over the same period (FBIOX Quote)Fidelity Select Biotechnology, the largest biotech fund out there, is up 87.5%.

Although the fund is closing to new investors Thursday, new retirement accounts, including individual retirement accounts, or IRAs, will continue to be accepted, according to a statement on the company's Web site. Given the aggressive and volatile nature of sector investing, the long-term nature of a tax-deferred retirement account might be a better fit for this fund than a standard taxable account.

The new T. Rowe fund will focus on stocks of companies based in developing markets like Eastern Europe, the Middle East, North Africa and Russia. The fund, whose initial offering or subscription period ran from July 21 to Aug. 25, will start trading Friday. TheStreet.com previewed the fund on July 26.