The Z-Seven Fund (ZSEV) announced that the proposal to convert to an open end fund has been approved by shareholders. The announcement didn’t have any impact on the fund’s share price though, as it didn’t even trade on the day of the announcement.
According to ETF Connect, Z-Seven is still trading at a discount of over 11%, but it may be difficult to make arbitrage profits by buying shares and redeeming them after the conversion. Since normal trading volume is so low for this fund, any large purchases could significantly drive up the share price, which coupled with a 2% redemption fee for shares sold within one year of the conversion, decreases the profit potential. Another thing to consider is that we don’t know when the conversion will take place. It may be a while before they have the paperwork filed with the SEC.