US - The Vanguard Group has filed a registration statement with the US Securities and Exchange Commission (SEC) for a new series of mutual funds designed to provide monthly payments to investors in retirement.
The proposed funds would be structured as funds-of-funds, investing predominantly in domestic and international stock index funds, bond and REIT index funds, inflation-protected securities and money market instruments.
According to Vanguard, the funds may also allocate a portion of their assets to commodity-linked investments, as well as other absolute-return strategies.
John J. Brennan, CEO at Vanguard, said: “We believe that the new funds will appeal to individuals who are seeking a regular income stream in retirement, but who also want to retain access to their accounts to meet unexpected expenses or, potentially, for estate planning reasons.”
Each fund is designed to provide level monthly payments throughout each year, with payments adjusted each year based on the fund’s performance over the previous three years. Investors will have a choice of three portfolio options based on their personal spending needs and other goals.
Brennan noted that the new offerings were aimed at retirees and those who are nearing retirement intending to roll over assets to an individual retirement account (IRA) from a defined contribution, defined benefit, or other tax-advantaged plan.
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