Two of the worst performing bond mutual funds have fired their in-house manager in favor of an outsider. On April 21, Morgan Asset Management Inc., a unit of Regions Financial Corp., announced that it had been relieved of its responsibility to oversee seven bond mutual funds. All the funds were previously managed by James Kelsoe.
Hyperion Brookfield Asset Management Inc., a unit of Brookfield Asset Management Inc., which manages $22 billion, will manage the portfolios going forward and a new board of directors will be nominated. Hyperion Brookfield is not entirely a stranger to the funds; it had been serving as an independent valuation consultant.
The Regions Morgan Keegan Select Intermediate Bond Fund and Regions Morgan Keegan Select High Income Fund both lost 70% or more over a 12-month period in large part because of their investments in low-quality mortgage-backed and asset-backed securities. In the past, these funds had been high-flyers because of these same investments. The housing slump led to the quick decline of the funds as the securities in them lost value and investors started pulling out.
Page Perry is an Atlanta-based law firm with over 125 years collective experience representing investors in securities-related litigation and arbitration. While past results are not indicative of future success, Page Perry’s attorneys have recovered over $1,000,000 for clients on more than 30 occasions. Page Perry’s attorneys are actively involved in counseling institutional and individual investors regarding their subprime investment problems and have brought claims for investors with losses relating to subprimes, including claims on these funds. For further information, please contact us.