Hi all, I've been watching RMK's (Regions Morgan Keegan's) closed-end income funds (CEFs) for awhile. I was even in RMA and RSF briefly for a 5% loss back in Oct. 2007. Recently I discovered RMK's Select Intermediate Bond Fund, which has SIGNIFICANTLY HIGHER CREDIT QUALITY than RMA, RHY, RSF, and RMH, yet it currently has a 76% NAV loss (without leverage) since 12/31/06. I am buying a large amount of the C class of RMK Select Intermediate Bond Fund (RIBCX); I have no other association with RMK.

RMK's Select Intermediate Bond Fund invests mostly in shares of packages of mortgages (CDOs and CMOs). As of 12/31/07, 49% of its holdings were rated between AAA and A-. 27% were rated between BBB+ and BBB-. 24% were rated BB or lower. (Those ratings have probably come down somewhat since 12/31/07.) The fund is NOT leveraged, and never has been as far as I know.

RIBCX's expense ratio is 1.11%, and there is a 1% charge if you sell within the first 12 months after purchase. The A class, MKIBX, has a lower expense ratio (0.76%) and a 2% front-end load, but no back-end load when you sell. As of 12/31/07, the fund holds 87 different securities. Unlike RMK's CEFs, there's no need to worry having to sell at discounts to NAV. Also, there's no need to worry about the bid/ask spread when you trade.

I'm not predicting any quick turnaround in home prices or the prices of CDOs and CMOs. I just see SO much fear in those markets that I think it's likely a large overreaction. Eventually I think those markets will come to their senses. Here are some relevant links:

http://www.morgankeegan.com/MK/Investing...

http://www.morgankeegan.com/NR/rdonlyres...
(especially pp.14-24)

TD Ameritrade does not trade RMK Select Intermediate Bond Fund; www.rmkbrokerage.com and some other brokers do trade it. I just set up an account at RMK brokerage. (To set up an account click on "Forms," and "New Account Questionnaire" and "W-9," print them out, fill them out, then fax to 501-371-6521. The "account transfer form" has wiring and ACH instructions. The phone for Morgan Keegan Brokerage is 800-222-8866.)

Note that the losses in various Morgan Keegan bond mutual funds and CEFs have prompted shareholder lawsuits, but any settlements or judgments would come out of Regions/Morgan Keegan, not out of the funds themselves. Best, Neil