[LOGO] KIRKPATRICK & LOCKHART 1800 Massachusetts Avenue, N.W.
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202.778.9000
202.778.9100 Fax
www.kl.com
November 5, 2004
Valerie J. Lithotomos
Senior Counsel
Office of Disclosure and Review
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Re: RMK Advantage Income Fund, Inc. ("Fund")
(File Nos. 333-18846 and 811-21631)
Dear Ms. Lithotomos:
This letter responds to the following comment, which we received from
Securities and Exchange Commission's staff by telephone: Please discuss whether
it is appropriate to include "Advantage" in the Fund's name. Below is our
response.
Unlike words such as "Municipal" or "Mexican," we do not believe that
including "Advantage" in the Fund's name suggests that the Fund will invest in a
particular type of security or employ a particular strategy. In fact, a number
of funds with different investment portfolios and strategies currently include
"Advantage" in their names. For example, Evergreen Income Advantage Fund, Inc.
is a closed fund with an investment objective of seeking a high level of current
income and a secondary objective of seeking capital appreciation to the extent
consistent with its primary investment objective. That fund invests in below
investment grade debt securities, loans and preferred stocks. Cohen & Steers
Advantage Income Realty Fund Inc., on the other hand, is a closed end fund that
has a primary investment objective of providing high current income through
investment in real estate securities and a secondary investment objective of
capital appreciation. In addition, Alliance All-Market Advantage Fund Inc. is a
closed-end fund with an investment objective of long term growth of capital
through all market conditions. That fund invests in a core portfolio of equity
securities of large companies.
Nonetheless, we note that the Fund has certain characteristics that
distinguish it from other closed end funds. First, unlike many other high income
funds, the Fund has the ability to invest in multiple asset categories,
including mortgage-backed securities, other asset-backed securities, REIT common
stocks, corporate bonds, convertible debt securities, foreign bonds, preferred
stocks, municipal securities and other equity securities. Morgan Asset
Management, Inc., the Fund's investment adviser ("Adviser"), believes that the
ability, and intention, to invest in a broad universe of securities provides
unique opportunities and exposure for the Fund. Second, the adviser utilizes a
"value" investing strategy that is focused on issuers and not macro-economic
Valerie J. Lithotomos, Esq.
November 5, 2004
Page 2
factors. The Adviser has an experienced research staff that analyzes the
financial and business fundamentals of particular issuers, as opposed to
engaging in technical analysis of broad financial market factors and indicators.
This "issuer focused" value approach provides greater opportunity for the Fund
to realize capital gain. Finally, the Adviser anticipates that the Fund will
leverage through a credit facility or commercial paper facility, which the
Adviser believes will enable the Fund to achieve maximum flexibility with the
lowest possible transaction costs, if economic conditions warrant increasing or
decreasing leverage from time to time. The Fund's ability to increase or
decrease leverage quickly and at a low marginal cost distinguishes it from those
funds that leverage through preferred stock or long-term secured debt, both of
which typically require higher transaction costs and longer time horizons to
change.
Due to the characteristics of the Fund described above, which the Adviser
believes offer potential advantages to Fund stockholders, and the use of
"Advantage" in other current funds, we do not believe there is any reason not to
include "Advantage" in the Fund's name.
If you have any further comments or questions regarding this response,
please contact Arthur J. Brown at (202) 778-9046 or Jennifer Gonzalez at (202)
778-9286. Thank you for your attention to this matter.
Sincerely,
/s/ Jennifer R. Gonzalez
Jennifer R. Gonzalez