Legg Mason Plans to Liquidate Market Neutral Trust Fund

Looks like Legg Mason is ready to throw in the towel on Legg Mason Market Neutral Trust.

The fund's directors believe the sputtering fund should be liquidated and have called a Sept. 29 shareholder vote on the matter, according to a Friday regulatory filing. The fund closed to new investors on Aug. 9.

Market-neutral funds are designed to produce a positive return without rising and falling with the stock or bond market. Their goal is typically to beat three-month T-bills by using part of the portfolio to hold stocks the managers think will rise and using the rest of the fund to short stocks they think are poised to fall. (Short-selling is a way to profit from a falling stock by selling borrowed stock in hopes of buying it at a lower price later on.) ...