Munder Capital said last week that it intends to merge several funds, including an international version of its well-known NetNet product.
The company will merge its International NetNet Fund into the Munder NetNet Fund. It will also merge its Digital Economy Fund into its Large-Cap Growth Fund and its Munder Framlington Global Financial Services Fund into its Large-Cap Value Fund.
Munder said in a statement that "these changes are being considered in light of the current investment environment and in an effort to reduce shareholder expenses." Shareholders must approve all of the mergers and should have the chance to decide the issue before early April, the firm said.
Munder earned acclaim with its NetNet Fund, which was one of the first total Internet funds to be distributed through broker-dealers, said Matt McGinness, an analyst at Cerulli Associates. "It had great performance when tech stocks were flying high," he said.
But McGinness said the firm weighted its product line too heavily in the tech sector and, as tech stocks plummeted in the late 1990s, Munder lost much of its appeal. "That's the problem when you marry yourself to a sector. You live and die by it," he said.
A statement about the mergers on the Munder Web site said, "It appears investors' appetite for an international technology investment is not as hardy as we believed."
In fact, the International NetNet Fund has plummeted -74.4% in one year, according to the company. It currently holds assets of just more than $134 million. The NetNet Fund that the international product will be merged into, meanwhile, has garnered about $2.3 billion in new assets. Its returns have fallen -55.68% in a year, according to Bloomberg.
