I dealt with this issue today at work, and its a non issue really. It hit my desk late last night from the research houses.
The fund is a unit trust which invests clents monies into mortgages. Since the government introduced the bank guarentee, there were a run on these fnds, generally they hold 3-10% liquidity.
As such they could not cope with the redemption requests and froze the fund. They have looked at various options and concluded that closing the fund is in the best interest to all members.
In respect to not being able to make interest payments,this has been taken way out of context, the fund recives interest and principal from th emoney it lends, what the trouble was, that there was a huge queue of redemptions that they had to cpay out pro rata.
By closingit and winding it up its fair to everyone invested.
I think future mortgage funds will be a fixed duration.