Fidelity Investments is really itching to get its hands on advisers' assets. The Boston fund group will soon take the wraps off of four new mutual funds that will adhere to very strict investment mandates - unlike the rest of Fidelity's funds, which tend to operate under relatively broad stock-picking guidelines.
The so-called structured funds - two growth and two value - are expected to become available in mid- to late November.
The new funds will be based on indexes such as the Russell MidCap Value Index or the Russell 1000 Growth Index. Expense ratios will range from .93% to .99% of assets.
While not aimed specifically at advisers, the structured funds are likely to catch their attention. Advisers have a soft spot for funds that aren't likely to surprise them.
"This is really an intriguing product for the adviser market," says John Bonnanzio, group editor at Fidelity Insight, an independent newsletter in Wellesley, Mass.
"Certainly, Fidelity has come to recognize that there are lots of different playing fields out there, and that it has to be on all of them."
The new funds aren't the only thing Fidelity is doing that is likely to spark adviser interest. The company recently announced that it had joined with New York's Morgan Stanley to launch Morgan Stanley Retirement Connection, a retirement-plan product aimed at businesses with plan assets of $5 million or more. The new offering, which uses Fidelity's record-keeping systems, will be sold by Morgan Stanley's 13,500 advisers early next year.
Pleasing Plato
Plato once said, "Beauty of style and harmony and grace and good rhythm depend on simplicity."
American Century Investments believes a fixed-income lineup needs simplicity too.
The Kansas City, Mo., mutual fund company is making its $17 billion fixed-income business less confusing for investors by eliminating jargon from names, consolidating funds with similar strategies and focusing more on general-purpose products.
"As an industry, we built way too many bond funds," says G. David MacEwen, American Century's chief investment officer for fixed income.
Investors are puzzled by too many options and usually just say, `Give me a bond fund,' says Mr. MacEwen. "Taxable and tax exempt was about as far as they needed to go."
Effective in December, American Century will reduce its number of fixed-income funds to 32, from 38.
Names such as the GNMA Fund will change to the Ginnie Mae Fund, and the Bond, Premium Bond and Intermediate-Term Bond funds will turn into the Diversified Bond Fund.
Plato surely would have approved.
Virtually the best?
How many armchair investors playing portfolio manager does it take to create a successful mutual fund? At least 100, according to Marketocracy Capital Management LLC in Los Altos, Calif.
That's the number of "virtual portfolios" managed by members of Marketocracy.com that make up the m100 Index, a tool that portfolio manager Ken Kam will use to help him manage the Masters 100 Fund.
Mr. Kam will generally follow the ideas of the m100 Index, which is engineered so that the index comprises the 100 best-performing virtual portfolios on Marketocracy.com.
The approach is intended to allow the Masters 100 Fund, which will open to investors Nov. 5, to shift quickly in response to the market.
