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Rating:Targeting the Conservative Investor Not Rated 0.0 Email Routing List Email & Route  Print Print
Monday, May 06, 2002

Targeting the Conservative Investor

by: Tony Pennino

Philadelphia-based Toews Corporation is priming up to get the word out about its two funds: Toews Nasdaq 100 Hedged Index (FO8NX) and Toews S&P 500 Hedged Index (FO8NV). The firm has created these products specifically for conservative investors -- particularly those who are retired or are approaching retirement.

"We are reaching out to the broker/dealer community right now," Phillip Toews, president and ceo at the firm, told the MutualFundWire.com. "We are talking to some of the larger companies like LPL, we are starting to market to them. We think that once the word starts to get out on these funds, though, that we will have to do very little marketing."

Though Toews will be seeking a national reach, the firm will be focused on the East Coast, where it is located. Barron's has written a couple of articles on the firm recently. And Toews himself will appear on CNNfn this week.

"I am trying to get a two-part message out," Toews revealed. "First, this market still holds enormous risks. Most people in retirement or pre-retirement are still too heavily weighted with risky investments. Second, there are very few solutions for investing in the stock market with low risk. Our offerings are two of the few options in the stock market with that kind of low risk."

"Typical investors aren't looking for astronomical gains or high risks," he continued. "They typically seek a reasonable rate of return above inflation combined with protection against significant losses. And that's what we aim to offer." During bull markets, the funds invest in the stock market indices. When there is a bear market, though, a "hedge" is put in place, which is designed to prevent further losses and generate Treasury rates of return. The funds are designed for investors who still need a growth stock but are risk adverse.

"Brokers have loved the concept. They have been following our performance over the last nine months. They have seen we have good performance. Now, we are starting to get some buzz," he contended. As these are relatively new funds, they do not yet have a Morningstar rating.

Toews is also looking at developing new products. The firm is expecting to launch a small cap index hedged product, an S&P 400 midcap hedge product, and an international index hedged product down the road.

"One thing that surprises me about the industry right is that we stand at almost unprecedented high levels, yet very few investment managers are looking at an extended decline in stock market or the possibility that one might be coming. There is little focus on investor needs. It is business as usual in an environment where it is not at all usual," Toews concluded. 

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