In a press statement released today,
Ranson & Associates Inc. announced it would be launching the first ever
Nasdaq-100 Index Fund. Sounds like a great idea ... unfortunately
American Express launched its own on November 4, with an expense ratio a bit higher than half of Ranson's.
This is the Wichita, Kansas-based company's first mutual fund, said
Doug Rogers, executive vice president, Ranson.
"We have been in the trust business for some time and have a large unit investment trust (UIT) business," he added. "UITs are not a big market but we've been successful with them so we think with the new fund we've filled what we thought was a void." The company has about $2.3 billion in UITs.
The Nasdaq-100 Index Fund will be launched on December 7 if all goes well with the SEC, Rogers said. It will be distributed through Ranson's broker/dealer network. The company plans to tap the 100 broker/dealers with which it has relationships to distribute the new fund. The fund will not be distributed through any fund supermarket for now but Rogers did not rule out such a possibility in the future.
It will be offered in both A and C shares and will also be offered to institutional investors in Y shares. There will be a 2.50% load on Class A shares for purchases of less than $100,000. The Class C shares will carry a 1.00% distribution and servicing fee.
The fund will have an expense ratio anticipated to be a whopping 135 basis points. Rogers said, "Hopefully it will be less going forward."
Of the 135 basis points, 50 basis points will go to the fund management. The American Express Nasdaq 100 Index Fund has a retail total expense ratio of 79 basis points.
When questioned about the high operating costs, Rogers said they are so high because Ranson is a smaller company and does not have as much leverage to negotiate fees with custodians and other institutions.
In the future Ranson is planning on launching several more funds but Rogers would not comment on any specifics.
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