, an institutional and private client investment management firm, has thrown its hat into the mutual fund ring. The firm yesterday launched the Broad Allocation Strategy Fund
, which employs the same strategy that has been available to Boston Advisors' SMA clients for the past two years. [SEC filing
| Peter Anderson|
The fund invests in traditional and non-traditional asset classes,
such as global equities and fixed income, real estate, commodities and currencies.
, executive vice president and director of business
development, said in an interview with The MFWire.com
that Boston Advisors has seen interest from institutional investors, wealth advisors, individuals and the defined contribution market for such a strategy to be offered in mutual fund format.
"We thought that in addition to having an investment process with good
risk management, the best way to differentiate our firm would be to launch
a mutual fund," Anderson said.
Anderson leads the two-person sales team at Boston Advisors. "We will probably
be growing the team in the coming quarters as we experience asset growth,"
Institutional class shares of the fund come with an expense ratio of 99 basis points.
BNY Mellon Investment Servicing
serves as the fund's transfer agent,
BNY Mellon Investment Servicing Trust Company
is the custodian,
Pepper Hamilton LLP
is the legal counsel and PricewaterhouseCoopers LLP
serves as the independent registered public accounting firm.
An employee-owned firm, Boston Advisors has been around for more than a decade and offers a total of eight strategies.
It has filed for shelf registrations for some of its other strategies.
While the company does not have immediate plans to launch a second mutual fund product, its next fund would probably be a small-cap fund, Anderson said.
Company Press Release
Boston Advisors LLC launches Broad Allocation Mutual Fund
New Fund Offers Investors the Potential to Enhance Portfolio Returns while Reducing Risk Through Most Market Conditions
Boston, January 31, 2011 – Boston Advisors LLC, an institutional and private client investment management firm, today announced that it is launching the Broad Allocation Strategy Fund on January 31, 2011, under the symbol BABIX. For the past two years, the company has run the strategy for clients in separately managed accounts and achieved attractive returns. Boston Advisors is now making the strategy available to mutual fund investors in an institutional share class.
The Fund invests in traditional and non-traditional asset classes, including global equities and fixed income, real estate, commodities and currencies. A flexible approach to asset allocation coupled with the diverse range of investment opportunities allows management to vary the risk profile of the fund and seek to take advantage of changing market conditions. The use of exchange-traded funds and closed-end funds adds to the strategy’s versatility.
A four-person team with a combined 90 years of experience managing multi-asset class products, complemented by the full investment team, manages the fund. The team employs proprietary quantitative models and qualitative analysis in making its investment decisions. Actively managing risk is an integral part of the investment process.
"We believe Broad Allocation Strategy Fund can play many roles in a portfolio." said President and Chief Investment Officer, Michael J. Vogelzang, CFA. "It can be a core part of a portfolio or a means of increasing the return potential in a fixed income-only portfolio or maintaining upside potential in an equity-only portfolio but with downside protection. We believe the fund is a significant step forward in helping investors achieve their investment goals through changing market environments."
Of course, all mutual fund investing involves some risk, including possible loss of principal. The Fund attempts to reduce risk and volatility by a flexible approach to asset allocation, and sometimes by means of an overlay strategy designed to hedge risk associated with certain asset classes. The overlay strategy may use short sales and derivatives (futures, options, swaps). However, there can be no guarantee that these techniques will succeed. To the extent that the investment advisor misjudges current market conditions, the Fund’s volatility may be amplified by its use of short sales and derivatives, and by its ability to concentrate more than 25% of its assets in one underlying fund or asset class. Fund performance also may be negatively affected by potentially high portfolio turnover.
Boston Advisors, LLC is an independent, privately held, majority employee-owned firm. It is a SEC registered adviser with $1.6 billion in assets under management. The firm provides extensive investment capabilities in equity and balanced management. The firm was originally founded as Boston Security Counselors in 1982 and became known as Boston Advisors, Inc. after it was purchased by The Advest Group in 1984. In 2004, AXA Financial purchased The Mony Group, parent of The Advest Group and soon thereafter, sold The Advest Group and Boston Advisors, Inc. to Merrill Lynch (now Bank of America). As a result of a management lead buyout, Boston Advisors, Inc. was reorganized as Boston Advisors, LLC, and on April 1, 2006 became a privately held, majority employee-owned firm.
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