FYI: On Dec. 10, Highland Funds II, a series of mutual funds run by Highland Capital Management Fund Advisors L.P. of Dallas, filed a form with the Securities and Exchange Commission stating that it couldn’t complete its annual report on time because it “needs to finalize its accounting analysis for the fair value measurement of a fair valued security.”
Why is that significant? On Nov. 8, investors in one of those funds, Highland Global Allocation, which currently has about $368 million in assets, approved a management proposal to convert it to a closed-end fund.
The issue: Unlike an open-ended mutual fund, a closed-end fund doesn’t give you your money back at net asset value when you sell; instead, you must find a third-party buyer for your shares on a stock exchange. And you might not like the price you get.
Regards,
Ted
https://www.wsj.com/articles/when-mutual-fund-values-get-muddy-11544816619?mod=searchresults&page=1&pos=2
