On Monday, AARP Financial
-- founded last year as a for-profit subsidiary of AARP -- officially launched its most recent products for the over-50 investor. The organization developed the three AARP Funds to replace Scudder
offerings previously distributed by AARP.
In early January, AARP ended a long pairing with Scudder and announced it would replace Scudder's funds with three "sophisticated, yet simple" index-based funds of AARP's own. The new AARP Funds -- which are subadvised by SSgA Funds Management, a State Street company -- include the AARP Conservative Fund
, the AARP Moderate Fund
and the AARP Aggressive Fund
Each fund uses a "fund of funds" method, investing in a broadly diversified portfolio of stocks, bonds, and securities. The portfolios track the MSCI Investable Market 2500 Index for U.S. stocks, the MSCI EAFE Index for international stocks, and the Lehman Brothers Aggregate Bond Index for U.S. bonds.
Jeanne Murphy Romano, a spokesperson for AARP Financial, said the AARP Funds have been available to the public as of late January, and are doing well on the market. "Our investors are very interested in the funds, and even more so in our approach," she said.
That approach is centered on low fees and assisted rebalancing. "Many investors find it difficult to construct a diversified portfolio and rebalance it on a regular basis, which is why those important features are already built into the AARP Funds," said Nancy M. Smith
, vice president for investment services at AARP Financial, in a statement.
Romano said it's too early to say whether additional offerings will be rolled out, but said the array may be expanded in time.
Outside the AARP Funds, AARP Financial offers credit cards, as well as home, auto and life insurance through third parties.
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