Few in the fund industry would argue that performance makes selling a fund much easier, but executives selling bear market funds would disagree. Since the Nasdaq and S&P 500 began declining early last year, bear market funds have, for the most part, enjoyed improved performance, as they are designed to do in a downward market.

But that has not made it easier to sell the funds, according to Paul McEntire, portfolio manager, president and chairman of the Bearguard Fund. After launching the fund a little over a year ago, McEntire was forced to file a preliminary proxy late last month seeking to liquidate the Bearguard Fund because it could not generate substantial flows. The funds' adviser, Skye Investment Advisors, had capped the fund's expenses at 2.75 percent and 2.50 percent for institutional and investor share classes, respectively. But Skye was heavily subsidizing the fund. Operating expenses were actually 20.12 percent and 20.05 percent for investor and institutional share classes, respectively, according to the proxy.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.