Smith Barney cites a deep discount between the stock (ITA, NYSE) and the funds net asset value (NAV), as the reason. The fund was trading at $6.59, a 5.8% discount from the funds NAV, as of Dec. 31, 2002, according to Morningstar.
At a Nov. 6 meeting of the board, however, the funds directors determined that while the fund, which returned 13.7% in 2002, beat the MSCI Italy Index, an ongoing spread of 10% or greater between the NAV and stock price had not been alleviated. The November filing did not specify what the spread was at that time. And while the latest filing listed the funds total assets under management as just under $35 million, Morningstar data shows that the Italy Fund recently had as much as nearly $150 million.
When the fund was launched in 1986, the Italian securities market was illiquid, and a closed-end fund that could trade on a secondary market made sense, according to the filing. Since then, the Italian securities market has matured, according to the funds management.
Two of the biggest holders in the fund, according to the filing, are Bankgesellscaft of Berlin and Lazard Freres.