Putnam Tax-Free Health Care Fund Meeting Ends Without Key Vote on Open-Ending

Aug. 2.06 | About: Putnam Tax-Free (PMH)
Putnam announcedMonday that at the shareholders meeting for the Putnam Tax-Free Health Care Fund (PMH), shareholders elected the board's director nominees, but there was no vote on the shareholder proposal to open-end the fund.

Based on the press release, it's not clear why the proposal was not voted upon. I would assume that if the proposal was not properly presented by the shareholder that this would have been stated in the press release. Another possibility is that it was the board's decision to not count the votes for this proposal because they had no intention of open-ending PMH regardless of the results.

If this was the case, it may come back to haunt the board. While PMH is not a terrible fund, an argument definitely could be made that shareholders would be better off with the return they would receive by eliminating the discount, than they would by maintaining the fund's closed-end status. If the board felt that they did not need to bother counting the votes to see what the shareholders wanted, this alone would be an excellent reason to open-end the fund and let shareholders take their money elsewhere.

Again, the above is only the case if the board decided on their own to not hold a vote on the shareholder proposal. Since no reason was given, my first assumption is that it was the board's decision, but this could be wrong.

PMH 1-yr chart:

PMH 1-yr chart