At least one industry observer recently criticized several open-end fund managers that have temporarily suspended redemptions, arguing the decision to do so during periods of relative illiquidity only serves to illustrate the inherent weakness in the open-end fund structure.

I respectfully disagree. In some countries, such as Germany and Australia, redemption requests must be met under regulatory mandates. This can force fund managers to liquidate assets at the worst possible moment. The fact U.S. regulators allow open-end fund managers to temporarily suspend redemptions is one of the strongest features of the U.S. open-end fund structure. When the fund manager is unable to arrive at clarity in terms of determining a net asset value that reflects true fair market value, the wise and prudent thing to do is precisely what some fund managers are doing right now: Suspend redemptions (as well as acceptance of new money) until the dust settles and the valuation picture becomes clea