Liberty Financial of Boston is asking shareholders of its Liberty Newport Global Equity Fund to approve plans to liquidate the fund and merge it with the Liberty Newport Global Utility Fund, according to a preliminary proxy statement filed with the SEC Oct. 12.
Liberty wants to merge the two funds "because it offers shareholders of the Fund an investment in a fund with similar investment goals and the economies of scale of a larger fund including a reduction in the fees and expenses of the Global Equity Fund," the proxy states.
If approved, shareholders' total expenses would drop 0.43 percent for A, B and C shares, according to the proxy.
While the funds share similar investment goals, the investment strategies are notably different. The equity fund cannot invest more than 25 percent of its total assets in one industry while the utility fund is allowed to invest 65 percent of its assets in public utilities companies. Also, the equity fund cannot invest in oil, mineral or gas commodities.
But after the acquisition and merger of the funds, the utility fund's investment strategy will be changed. Trustees of the fund want to lower its investment in utilities from 65 to 50 percent and allow the fund to invest up to 50 percent of the fund's total assets in equity and debt securities not issued by utilities. The fund will also assume the name of the fund it would be merged with, the Global Equity Fund, according to the proxy.
Year to date, the Global Equity Fund has approximately $50 million in assets under management and the Global Utilities Fund has $179 million, according to Morningstar of Chicago.
