Each of the funds will hold shares in exchange-traded funds as well as stocks and bonds, with four of them U.S. equity funds, three U.S. bond funds and three international funds.
Financial advisers have long advocated mixing both active and passive strategies in a portfolio, and have frequently noted that since it’s hard for the manager of a large-cap fund to beat the benchmark, perhaps holding that asset class through a low-cost ETF is preferable to an actively managed fund.
FundQuest said that the mix of active and passive management would be different for each fund. For the emerging markets fund, for instance, 90% of the assets will be actively managed since information on those markets is still somewhat scarce and has not become a commodity, but the U.S. large-cap fund will only have 35% of its assets actively managed. That could change somewhat, however, depending on market conditions and a manager’s skill.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.
