Closed-End Funds Feel Twice the Pain

Last week's worldwide stock market implosion hit closed-end mutual funds particularly hard.

Many suffered a one-two punch as their shares sold off even faster than those of their holdings.

As a result, not only have their net asset values fallen, their shares are trading at even bigger discounts to NAV than they were at the end of the previous week.

Unlike open-end funds, which continuously issue and redeem shares at their net asset values, closed-end funds issue a fixed number of shares.

The only way to get out is to sell the shares to another investor, and when everyone is headed for the door at the same time, they have to be willing to leave something behind.

To identify the closed-end funds that fared the worst from these combined effects of dwindling asset values and widening discounts, TheStreet.com Ratings searched its database for those meeting the following criteria:

• Decline of more than 6% in market price during the week ended March 2.
• Discount of market price relative to net asset value per share of at least 3% on March 2.
• Deterioration of the premium/discount ratio of more than 2 percentage points during the week.

Not surprisingly, closed-end funds that invest in China experienced some of the sharpest deteriorations in the value of their shares relative to that of their NAV.

At the top of the list is the (CGH Quote)Greater China Fund (CGH); its shares fell 14.51%, and its discount to NAV widened by 6.77 percentage points, to 9.45% from 2.68%.

Measuring the Pain Here's how these closed-end funds fared
Name, Symbol & TSC Ratings Grade *	Price Change 2/23 - 3/2 (%)	3-Mo Avg Prem/ Disc (%) **	2/23/07 Prem/ Disc (%)	3/2/07 Prem/ Disc (%)	1-Week Change in Prem/ Disc (%)
Greater China Fund (GCH) - C	-14.51	6.55	-2.68	-9.45	-6.77
Malaysia Fund (MF) - C	-13.83	-7.46	-3.19	-5.88	-2.69
Mexico Equity & Income Fund (MXE) - B	-13.80	-6.38	-2.36	-8.08	-5.72
Emerging Market Telecom Fund (ETF) - B-	-13.31	-5.50	-4.36	-10.97	-6.61
Morgan Stanley China A Share Fund (CAF) - U	-12.93	4.23	-8.14	-12.03	-3.89
RMR Asia Pacific Real Estate Fund (RAP) - U	-12.75	-4.97	-7.45	-12.78	-5.33
The New Ireland Fund (IRL) - B+	-12.46	-1.85	4.16	-3.28	-7.44
Latin America Equity Fund (LAQ) - C+	-11.38	-7.13	-7.21	-10.29	-3.08
Asia Pacific Fund (APB) - C+	-11.35	-4.68	-4.79	-8.19	-3.40
Korea Equity Fund (KEF) - C	-10.53	-6.87	-2.67	-8.75	-6.08
China Fund (CHN) - C	-9.79	-2.82	-10.65	-14.18	-3.53
Morgan Stanley Eastern Europe (RNE) - C	-9.72	5.76	-4.56	-7.02	-2.46
Templeton Dragon Fund (TDF) - C	-9.58	-4.03	-9.72	-13.33	-3.61
JF China Region Fund (JFC) - C-	-9.36	-5.93	-8.13	-11.45	-3.32
Templeton Emerging Markets Fd (EMF) - C	-9.33	-2.12	-6.19	-8.97	-2.78
New Germany Fund (GF) - B-	-9.25	-9.33	-8.00	-10.02	-2.02
Asia Tigers Fund (GRR) - C+	-9.20	0.70	-6.27	-9.42	-3.15
Korea Fund (KF) - C	-8.96	-4.95	-1.80	-6.96	-5.16
India Fund (IFN) - C+	-7.75	5.45	-1.05	-3.62	-2.57
Chile Fund (CH) - B-	-7.38	-0.27	-1.98	-5.47	-3.49
Swiss Helvetia Fund (SWZ) - B	-6.75	-7.90	-6.75	-8.89	-2.14
Japan Equity Fund (JEQ) - C-	-6.66	-4.75	-2.07	-6.45	-4.38
Western Asset Managed High Income (MHY) - C	-6.52	-7.39	-2.08	-7.95	-5.87
* TheStreet.com Ratings Grade of "U" means "unrated." ** Average for three months ended Jan. 31, 2007. Source: TheStreet.com Ratings

Of the 23 funds we identified, 13 were Asian-focused, with four specifically targeting China. And all but one of the funds on the list have an international focus.