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Products October 31, 2007
MBIA Asset Management to Launch Two Inflation Protected Funds
MBIA Asset Management plans to launch two new inflation protected, open-ended funds designed for institutional investors, pension funds, and high-net-worth individuals.
Reported by Adrien Martin
According to a press release, the MBIA Municipal Bond Inflation Fund is set to launch in early November and the MBIA Multi-Sector Inflation Protection fund in set to launch in early 2008.
The municipal bond fund will get an initial funding of $25 million and will create a municipal bond portfolio which guards against inflation, similar to the protection provided by Treasury Inflation-Protection Securities (TIPS).
The municipal bond fund gives investors access to municipal inflation protected securities or MIPS, which are a growing but still relatively small part of the bond market. In order to increase the available supply of MIPS, the fund will synthetically create MIPS by overlaying inflation swaps on a diversified portfolio of municipal bonds, which the company says will provide investors with higher inflation-adjusted returns and better diversification than natural MIPS.
The MBIA Multi-Sector Inflation Protection Fund is designed to provide well-diversified exposure to the commodities, TIPS and real estate sectors. Each provides a slightly different form of protection at different phases of the inflationary cycle. This fund gives the investor exposure to the three primary inflation hedging sectors.
For more information on MBIA Asset Management, visit www.mbiaam.com.