While hybrid mutual fund and annuity product solutions began gaining advisers’ and investors’ attention last year, such managed payout funds still have flaws. That’s according to a report from MarketWatch.

The biggest problem is that in down markets, many of these funds have to eat away at their principal in order to honor payment guarantees. As MarketWatch puts it, “They may be eating themselves alive.”

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.