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Portfolio > Mutual Funds

Top Portfolio Products: Fidelity Launches Two Funds; Highland Premieres One

By Marlene Y. Satter

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New products introduced over the last week include two emerging markets funds from Fidelity and a dividend equity fund from Highland Funds.

In addition, the Adams Express Company met its annual distribution commitment and Security Benefit launched a new fixed annuity.

Here are the latest developments of interest to advisors:

1) Fidelity Launches Two Emerging Markets Funds

Fidelity Investments announced Wednesday that it has expanded its emerging markets fund offering with the launch of Fidelity Total Emerging Markets Fund (FTEMX) and Fidelity Emerging Markets Discovery Fund (FEDDX). FTEMX, lead managed by 16-year Fidelity veteran John H. Carlson, seeks income and capital growth by investing in both equity and debt securities of emerging-markets issuers, and offers investors exposure to both emerging markets equities and emerging market debt through a single investment. FEDDX, managed by Ashish Swarup, seeks capital appreciation by investing in equity securities of emerging-markets issuers and provides investors access to small- and mid-sized emerging market companies.

Fidelity also published two new papers focused on emerging markets investing: “The Case for Balanced Investing in Emerging Markets” and “Structural Growth Opportunities in Emerging-Market Small-Cap Stocks.” These papers analyze the development and maturation of emerging markets, as well as the long-term investment opportunities.

2) Highland Funds Launches Dividend Equity Fund; Brookmont to Serve as Subadvisor

Highland Funds Asset Management, L.P. announced on November 7 the launch of the Highland Dividend Equity Fund (HDFAX). Brookmont Capital Management, LLC will serve as the fund’s subadvisor.

HDFAX will employ a strategy of individual common stocks that seeks to provide above-average dividend yields with the potential for long-term capital gains. It will choose stocks of companies from all 10 economic sectors as defined by Standard & Poor’s. Brookmont cofounders Neal Scott and Robert Bugg will serve as portfolio managers.

3) The Adams Express Company Meets 6% Annual Distribution Commitment

The board of directors of The Adams Express Company (ADX) declared Thursday a year-end distribution of $0.50 per share, consisting of a capital gains distribution of $0.48 per share from net capital gains realized during 2011, comprised of $0.06 short-term and $0.42 long-term capital gain; and an income dividend of $0.02 per share from 2011 net investment income. The payable date for the distribution is December 27, 2011, the record date is November 21, 2011, and the ex-dividend date is November 17, 2011. Both payments are payable in stock or cash at the option of each stockholder.

With this distribution, total distributions for 2011 will be $0.65, including distributions of $0.15 per share made prior to this announcement, which consisted of $0.13 from net investment income, $0.01 from short-term capital gain, and $0.01 from long-term capital gain. The annual distribution rate represented by these distributions is 6.1%. The annual distribution rate is the total income dividends and capital gain distributions during the year divided by the average month-end market price of the company’s common stock on the NYSE for the twelve months ended October 31.

4) New Fixed Annuity from Security Benefit Brings Flexibility to 403(B) Marketplace

Security Benefit Corporation, a Guggenheim Partners Company, today announced recently launch of the Total Interest Annuity, the firm’s first fixed annuity product designed to accept ongoing contributions. The annuity will be issued by Security Benefit Life Insurance Company (SBL), a subsidiary of Security Benefit Corporation.

Built specifically for the 403(b) market, the annuity can be funded with contributions up to $16,500 annually or with IRA contributions or rollovers. The initial guaranteed crediting rate, which Security Benefit expects to be highly competitive, will be reset after 12 months and every year thereafter. The annuity may be well suited for participants in the education arena who are conservative, have assets in retirement vehicles with significant market volatility, or are near retirement. SBL hopes to incentivize clients for early saving through an attractive initial guaranteed crediting rate, boosted by a 2% bonus on all contributions or transfers in the first contract year.

Read last week’s Portfolio Products Roundup at AdvisorOne.com

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