AST Trust taps indexer to oversee ETFs

FWR Staff

28 March 2006

Trust-service provider likes XTF's collective structure. Trust-service outsourcer AST Trust Company has appointed XTF Advisors to manage exchange-traded-fund portfolios that are part of retirement plans. These ETF collective trusts will be available to qualified plan sponsors through financial advisors and third-party administrators.

Steve Ferber, executive v.p. of collective-fund services at AST, says XTF got the nod because of its cost-effectiveness and its user-friendly collective fund structure.

Collective funds are similar to mutual funds, but they are available only to qualified retirement plans such as 401s. The availability of collective funds means that ETFs and ETF-based portfolios now are available on retirement-plan platforms, which may result in lower costs when compared with actively or passively managed mutual funds.

XTF Advisors, a new York-based investment-platform provider to financial advisors of all stripes says it has a track record of administering actively managed ETF portfolios. By re-allocating assets to minimize risk, XTF enhances the overall performance of a portfolio and therefore the benefits available to the investor.

"We see this choice as a right step toward helping Americans reap attractive benefits and returns from their retirement savings programs, based on their own particular risk profiles," says XTF's chairman and CEO Sander Gerber.

According to its agreement with AST, XTF will be in charge of creating portfolios, determining risk and allocating assets, as well as rebalancing the portfolio when and as needed. AST will act as a trustee to the funds.

Phoenix, Ariz.-based AST is a directed trustee, trust-administration and back-office trust-service provider to registered investment advisors, family offices and other financial advisors. It is a division of American Stock Transfer & Trust Company, a New York-based stock-transfer and trust company that administers more than six million shareholder accounts on behalf of more than 2,500 public-company equity issuers. -FWR