Directors of the $110 million closed-end Mexico Fund approved three proposals aimed at expanding the fund's investment scope, but the proposals failed to garner the necessary two-thirds vote required to adopt the measure, according to the fund.
Following the vote, the fund's adviser announced it would seek shareholder approval to convert the fund from a diversified to a non-diversified fund, allowing the fund's adviser to take larger stakes in companies it holds in the fund portfolio.
The adviser also said it would seek approval to concentrate investments in particular sectors such as telecommunications and banking.
The adviser also said it would seek permission to invest in companies listed on other Mexican exchanges, as long as the companies had more than 50 percent of their assets in Mexico or derived 50 percent or more of their revenues from the country.
The fund is managed by Impulsora del Fondo Mexico of Polanco, Mexico, a corporation that is registered with the SEC and has been the adviser to the closed-end fund since its inception in 1982. The fund invests exclusively in equity securities traded on the Bolsa Mexicana de Valores, S.A., Mexico's primary stock exchange in Mexico City.
Year-to-date through Sept. 30, the fund has lost 13.24 percent of its value according to Wiesenberger/Thomson Financial, the fund data company in Rockville, Md.
The fund's board of directors will explore other options, the fund announced.