NU Online News Service, June 29, 2004, 6:33 p.m. EDT
Units of American International Group Inc., New York, and Prudential Financial Inc., Newark, N.J., are joining to sell mutual funds that could help investors lock in gains as well as guarantee return of principal.[@@]
The 3 new High Watermark funds are open-end mutual funds that will mature in 2010, 2015 and 2020.
AIG’s AIG SunAmerica Asset Management Corp. unit, the manager of the funds, is promising that investors can lock in the highest net asset value attained during the life of the funds if they hold the shares to maturity.
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Prudential’s Prudential Global Funding Inc. unit is backing the guarantees with put agreements. The guarantees could fail in an extreme market upheaval, because the guarantees depend on the financial condition of Prudential and Prudential Global. AIG SunAmerica Asset Management says it is “not obligated to replace the put agreement provider” if Prudential and Prudential Global are unable to support the guarantees.