After an unsuccessful attempt to open-end the Brazil Fund (NYSEARCA:BZF), the board has now announced that they will present to shareholders a proposal to liquidate the fund. They will follow in the footsteps of the Scudder New Asia Fund by also presenting a proposal to amend the fund's Articles of Incorporation so that only a majority of shares would have to be voted in favor of the liquidation proposal for approval.
It is interesting that the proposal adopted for this fund has changed from an open-ending to a liquidation. For different shareholders, either of these outcomes could be preferable. If a shareholder still wanted to invest in the Brazil Fund, but have the flexibility to sell their shares for NAV at any time, an open-ending would be better. But if the shareholder planned on selling their shares fairly soon, a liquidation would allow them to avoid the 2% redemption fee that would have been applied for the first six months. It looks like the biggest shareholders in BZF decided that they wanted access to their capital as soon as possible, and without a redemption fee.