Products April 21, 2008

FundQuest Puts Out Active-Passive Combo Funds

FundQuest, a managed account provider, has launched nine mutual funds as part of its new ActivePassive Funds family.
Reported by

The funds combine active and passive investment strategies within a single portfolio and are now available through Fidelity, Pershing, and TD Ameritrade, and will soon be available through Schwab. The ActivePassive Funds family offers four U.S. equity funds, two U.S. bond funds, and three international funds.

The results of FundQuest’s research determined the optimal percentage of actively and passively managed investments for each of the nine funds, the company said. The range of active management in each fund varies from an optimal 36% for large cap to an optimal 95% for emerging markets.

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FundQuest hired subadvisers for the active management portion of the funds and the passive investments incorporate either exchange-traded funds (ETFs) or index-based mutual funds that track each category’s index.

More information is available at www.activepassivefunds.com.

Products April 21, 2008

Vanguard Releases Managed Payout Offerings

The Vanguard Group has unveiled the Vanguard Managed Payout Funds, designed to function much like an endowment by investing over the long-term to preserve or build capital while generating monthly payments.
Reported by

According to the company, the funds offer distinct objectives for investors with varying income needs and principal growth goals:

  • The Vanguard Managed Payout Growth Focus Fund seeks to make monthly distributions of cash while providing inflation protection and capital appreciation over the long term.
  • The Vanguard Managed Payout Growth and Distribution Fund seeks to make monthly distributions of cash while providing inflation protection and capital preservation over the long term.
  • The Vanguard Managed Payout Distribution Focus Fund seeks to make monthly distributions of cash while providing capital preservation over the long term.

The new products are structured as funds-of-funds and may invest in low-cost Vanguard domestic and international stock index funds, bond and REIT index funds, and inflation-protected securities and money market instruments. The funds may also allocate a portion of their assets to commodity-linked and market neutral investments that are expected to add diversification and result in a more consistent return pattern than a traditional balanced portfolio of stocks, bonds, and cash.

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In order to educate investors interested in the Managed Payout Funds, Vanguard has introduced two new tools at Vanguard.com:

  • A payout calculator to help estimate initial monthly payouts based on a specific investment amount or to estimate the investment amount needed to generate a specific initial monthly payout amount.
  • A “Which fund is right for me?” tool to help investors choose the Managed Payout Fund most appropriate for their needs and risk tolerance.

The company said investors can access their assets at any time. The minimum initial investment requirement is $25,000. The funds have no sales commission, and their annual expense ratios are expected to range between 0.57% and 0.58%.

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