I am retired and take educated guesses on all things financial.

April 24, 2010

April 25, 2010: American Century Launches Strategic Inflation Opportunities Fund

Many seasoned investors have come to the conclusion that all "good" things will come to an end regarding low interest rates and government-stimulated schemes. It is surmised that the end game will be inflation and a depressed dollar coupled with higher taxes to claw out of the massive debt.

Of course, the exact path will be muddy, and to some extent unpredictable. Thus, bets must be placed on a variety of securities, currencies and commodities while still grasping for some yield.

On April 30th, American Century Investments will launch what may be a very comfortable no-load fund to address the above - the Strategic Inflation Opportunities Fund. This investment vehicle will be managed by both fixed income and quantitative equity experts from American Century's stable of respected professionals, including senior portfolio managers Robert Gahagan, William Martin, Scott Wittman, Federica Garcia, John Lovito and Brian Howell.

Fifty percent of the fund will invest in US fixed income securities, including inflation-indexed securities issued by corporations and the US government. Twenty-five percent of the fund will be invested in commodity-related investments such as commodity-linked notes and stocks of companies engaged in the commodity oriented businesses. And, twenty-five percent of the portfolio will be invested in non-US dollar investments such as currency instruments, foreign government or corporate high quality debt and inflation-indexed securities.

The benchmark will be achieving a total return of three percentage points above the Barclays Capital 1-3 Month Treasury Bill Index.

With some excellent leadership aboard, this new fund may be worthwhile to explore as an addition to your portfolio. As with all new fund launches, make sure to be patient and look under the hood for the asset roster. And, of course, the "hidden" costs of ownership.

I believe a managed fund with the stated goal of being mindful of inflation in many forms may well perform in a superior way to an index-based entity. Flexibility counts.

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