AssetMark markets "fundamental" index mutual funds

FWR Staff

25 June 2007

Investment provider to distribute value-tilted large- and small-cap pools. Third-party investment platform provider AssetMark plans to launch a family of no-load mutual funds sub-advised by Research Affiliates, on whose "fundamental index" concept the program is based.

"We think that the fundamental index concept is incredibly powerful and will strongly resonate with advisors and investors," says AssetMark's chairman Ronald Cordes. "By partnering with Research Affiliates, a leader in this area, we feel that our clients now have access to a truly revolutionary approach to indexing."

Value tilt

Unlike cap-weighted indexing, AssetMark's Fundamental Index Funds are based on stocks selected for measures of the underlying firm's strength such as sales, cash flow, dividends and book value. The offering includes four equity funds: large-company growth and large-company value; small-company growth and small-company value.

"The traditional cap-weighted approach to investing tends to overweight overvalued stocks and underweight undervalued stocks. We feel that Fundamental Index method does a better job of mirroring the composition of the broader economy as a whole," says Research Affiliates' chairman Robert Arnott. "We're pleased that our new partnership with AssetMark makes it possible for more advisors and investors to have access to this type of investment approach."

AssetMark is a subsidiary of Richmond, Va.-based Genworth Financial. It administers around 80,000 client accounts with more than $18 billion in assets.

More $22 billion in assets are managed using investment strategies developed by Pasadena, Calif.-based Research Affiliates. -FWR