Plus, PIMCO's retirement funds, 130/30 launches, and more.
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Target Retirement Funds, PIMCO-Style
As asset managers have caught on to the appeal of target-date retirement funds--those one-stop-shopping options for investors wanting a simple, hassle-free way to invest for retirement--the sector has taken off. Enter PIMCO. In a recent filing, the bond management firm outlined plans to join the target-retirement fray in 2008 by launching a series of so-called RealRetirement Funds with target dates ranging from 2010 to 2050.
So far, much of the target-retirement debate has centered on achieving the right mix of stocks versus bonds and the degree to which that mix becomes more conservative over time. The proposed PIMCO funds, though, appear to offer a new twist on this formula. Instead of stashing close to 90% of assets in equities from the get-go, as is common for target funds with longer investment horizons, the PIMCO funds will take a more diversified approach, supplementing traditional stock and bond holdings with a helping of "real" assets, such as commodities and real estate. PIMCO also appears to be placing more emphasis than rivals on hedging against inflation: As investors near retirement, for instance, a growing stake in Treasury Inflation-Protected Securities will enter the mix.
The funds will be managed by Jamil Baz, who joined PIMCO in April 2007 after prior stints at Goldman Sachs and Deutsche Bank. Fee estimates were not disclosed in the filing.
When it Rains 130/30 Funds, It Really Pours
Once reserved for institutional and high-net worth investors, 130/30 products have begun entering the retail space in earnest. As BlackRock's 130/30 product, BlackRock Large Cap Core Plus, hits the market this week, three more fund companies announced plans to launch similar offerings in 2008. First up, Fidelity will throw its hat into the long-short ring with Fidelity 130/30 Large Cap. Skipper Keith Quinton, who blends quantitative and fundamental analysis in running Fidelity Disciplined Equity
Bear Stearns may not be as ubiquitous as Fidelity when it comes to retail mutual funds, but it, too, will launch a 130/30 fund (Bear Stearns Multifactor 130/30 Core Equity). The offering will focus on domestic stocks in the Russell 3000 Index. Michael Rosen, who heads the quantitative equity team at Bear Stearns Asset Management, will manage the fund, and fees will be capped at 1.25%.