Has deflation opened up closed-ended investment funds?

In March 2009, the Retail Price Index (RPI) showed inflation was -0.4% on an annual basis, down from...

In March 2009, the Retail Price Index (RPI) showed inflation was -0.4% on an annual basis, down from 0% in February. This would seem to show, despite the measures taken by the Government, including quantitative easing designed to achieve the opposite effect, deflation has returned. Deflation causes immediate problems for investment companies since, as asset values decrease, performance is likely to be relatively poor and returns to shareholders disappointing. This is especially true of funds which are geared as the reductions in net asset value (NAV) are likely to be even greater. In addi...