Bowing to competitive pressure from other mutual-fund firms, AARP, the membership group for people age 50 and over, said it will liquidate its lineup of stock and bond funds.
The termination of the group's four funds is expected to occur around Oct. 1, said Richard "Mack" Hisey, AARP Funds' president, in a telephone interview. AARP Financial announced the discontinuation of the funds in a filing with the Securities and Exchange Commission late Tuesday.
"Liquidation was the best option for shareholders," Hisey said. The funds' directors had also discussed the possibility of another fund family acquiring the assets. Instead, shareholders will have to find alternatives on their own or receive a check once the funds are shuttered.
The group's AARP Financial unit introduced four index-tracking funds at the end of 2005, with each portfolio geared to an investor's risk tolerance. AARP Aggressive Fund, for example, held 60% of assets in U.S. stocks, 20% in international stocks and 20% in bonds, while at the opposite extreme, AARP Income Fund kept 75% of assets in U.S. bonds and 25% in other fixed-income investments.
"There are a number of reasonable alternatives to these funds in the marketplace," Hisey said.
-Jonathan Burton; 415-439-6400; AskNewswires@dowjones.com
Copyright 2009 Dow Jones Newswires
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