Monday, September 27, 2010

New Financial Products Part II - Citi's Inflation Hedge Portfolio

I got an email from my Morgan Stanley Smith Barney broker today about a new product they were offering.  It was a 2 page .pdf, with the opening paragraph:

"When it comes to investing — whether for income or for growth — you can’t afford to ignore the eroding effect inflation can have on the value of your assets. Inflation is essentially a measure of the increase in the price of goods and services. According to the U.S. Bureau of Labor Statistics, inflation has reduced Americans’ purchasing power in every year but two dating back to 1945."

They proceed to describe some asset classes used to protect against inflation: gold and precious metals, TIPS, and short bond positions.  Then, they offer details on the portfolio - the product will basically trade like a mutual fund, I think (ticker: FHDGFX) , and have some juicy fees - ranging from 3.95% for lots under $50k, to 2.45% for investments larger than $1mm.

So what's in it?  

49% ETFS:  GLD, SLV, IAU, TIP, TBT, PST (individual weights not given)
51% Materials Stocks:  AAUK, BHP, RTP, FCX, IMPUY, AUY

For what it's worth....



Josh said...

Oh wonderful, so by buying that piece of sh*t fund I can hedge some of Morgan Stanley's inflation risk? Sign me up!

Kid Dynamite said...

josh - i wouldn't put it that way. MS's inflation risk isn't going to change if you decide to buy this fund

Josh said...

joke about the fees, not analysis. lol