he bear market is causing many fund firms to take a step back and reevaluate their product line-up. The goal, of course, is to weed out those products that no longer are marketable and are costing more than they bring in.
Actually closing these funds, though, is not always so easy as sometimes, fund shareholders do have a mind of their own.
The latest fund firm to discover this was American Century
, which is trying to close its Global Natural Resources
fund. The reason for the closing is apparent; the fund has attracted just $26 million in assets after eight years and is not in a hot sector so there is little help that sales will pick up.
Rather than merge the fund (as it has always done with such funds in the past), American Century proposed liquidating it. All that was needed was shareholder approval, typically a given.
Yet, when the votes were counted the proposal failed to receive the necessary votes.
One reason for the failure for the proposal to gain enough votes may have been a glitch in the process. American Century found a mistake mailed in the proxy mailed to shareholders and had to send a second package.
That duplicate mailing may have confused enough shareholders to twist the vote.
Whatever the reason, American Century officials are now mulling over their next step. One possibility is to have shareholders vote on the proposal all over again.
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