Amway Corp. of Ada, Mich. is creating an Internet sales network that could become a powerful distribution channel for its revamped mutual fund business.

In June, Amway sought to broaden its mutual fund product offerings and filed with the SEC to create four new funds. This was done to supplant its sole fund product, the Amway Mutual Fund, a value fund that has quietly gathered $225 million in assets under management since 1970.

At the same time, the owners of Amway went ahead and created a new investment adviser, Activa Asset Management LLC of Grand Rapids, Mich., which will manage the new family of funds, named the Activa Mutual Funds.

Amway officials have declined to talk about their plans to create the fund family or change its name. But the company is clearly up to something different.

This fall, Amway plans to announce what appears to be a major Internet initiative called Quixtar, a Web-based sister company started by Amway's owners, the Van Andel and DeVos families. The Activa Mutual Funds will be a part of this Quixtar business, according to a Quixtar spokesperson.

Amway is one of the largest direct sellers in the world. The company employs people who sell everything from personal care products to major appliances out of their homes to their friends and neighbors. It has over 2.5 million of these homegrown distributors in 80 countries. Its annual sales figures are in the billions.

According to SEC filings, Amway is creating a growth, an international, a bond and a money market fund to join the Activa Value Fund, the new name for the Amway Mutual Fund. The funds are to be sold directly to retail investors with a $500 minimum investment and through retirement plans of Amway and its affiliates, according to SEC filings.

Amway is retaining Ark Asset Management of New York as sub-adviser to the Activa Value Fund, but other money management firms, including Nicholas Applegate of New York and State Street Research & Management of Boston, will sub-advise the other Activa funds.

It is not clear exactly how the Quixtar business model will work or how the site might be used to sell mutual funds. Activa Asset Management has already created a web site for the Activa Mutual Funds. The site makes no mention of the Amway Mutual Fund or Amway Corp., but says that it will start offering mutual funds to the public on Sept. 1, the day the Quixtar business is expected to be launched.

The funds are being sold without a sales load, and shareholders will be allowed to make exchanges between funds over the Internet and the telephone. Each of the Activa funds, except for the money market funds, will be sold with a 12b-1 fee of 15 basis points.

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