REGIONS MORGAN KEEGAN MUTUAL FUNDS STRUGGLING DUE TO SUBPRIME LOSSES
Several Regions Morgan Keegan Funds, such as the RMK Select High Income Fund and the RMK Select Intermediate Bond Fund have been facing tough times due to their exposure to subprime debt. The funds’ dramatic losses have sparked another phenomenon, a rush from shareholders to get out.
Bloomberg.com reports that “Morgan Keegan, with more than $7.4 billion in assets under management, said in an Aug. 30 SEC filing that three of its bond funds would delay semi-annual regulatory reports because ‘recent instability’ in fixed income markets required ‘a more extensive process’ to verify the values of certain securities. Of the three, Regions Morgan Keegan Select High Income Fund and Regions Morgan Keegan Select Intermediate Bond Fund have ‘experienced significant net redemptions,’ according to an Aug. 13 notice to investors. Should they need to sell securities to pay departing shareholders, getting a ‘fair’ price ‘may be difficult,’ the notice said.”
That notice can’t be encouraging to shareholders. It is understandable why they want to get out as fast as possible.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=avblNsmdksmY#
