AIG VALIC has started offering group retirement plans a family of 3 new mutual funds that come with rich performance guarantees.[@@]
AIG VALIC, Houston, has set up an insurance arrangement with a unit of Prudential Financial Inc., Newark, N.J., that can protect the fund shareholders’ investment gains as well as the shareholders’ principal, according to AIG VALIC.
The new funds, the High Watermark Funds, are set to mature in 5, 10 and 15 years.
AIG VALIC introduced retail versions of similar funds a year ago.
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One of AIG VALIC’s sister companies, AIG SunAmerica Asset Management Corp., is the manager of the new funds, and Trajectory Asset Management L.L.C., is the advisor, according to AIG VALIC, which is a unit of American International Group Inc., New York.
Many lifecycle funds are “funds of funds,” meaning that the managers invest the funds’ assets in other funds. The managers of the High Watermark funds will invest those funds’ assets directly in stock index futures and other instruments, without relying on other mutual funds, according to AIG VALIC.
Moreover, the guarantee arrangement that AIG VALIC has set up with Prudential should allow retirement plan members who keep their money in the funds until the funds mature to receive the “highest net asset value attained during the life of the fund, adjusted for extraordinary expenses,” AIG VALIC says.