Jackson National Life Insurance Co., a Lansing, Mich., unit of Prudential PLC, has launched a family of mutual funds to diversify its mix of investment products.
The Jackson Perspective 5 Fund, the Jackson Perspective Optimized 5 Fund, the Jackson Perspective Index 5 Fund, the Jackson Perspective 10x10 Fund, and the Jackson Perspective Money Market Fund were launched Tuesday. Each fund uses an asset allocation strategy.
The insurer's Jackson National Life Distributors LLC will sell the funds through advisers.
Greg Salsbury, an executive vice president at the distribution unit, said in an interview Wednesday that the funds are designed to help investors plan for retirement. Each uses a strategy that mirrors one used for a Jackson National variable annuity, he said.
Jackson National launched the funds because advisers were interested in mutual funds that follow those strategies, he said. "These funds were really pulled into the market more than pushed."
The insurer, which has $70 billion of assets under management, offers fixed, variable, and index annuities, but the bulk of its inflows in the past three years have come from variable products. In the first nine months of last year its sales of variable annuities through banks rose 52% from a year earlier, to $475 million, while sales of those products through all channels jumped 48%, to $5.1 billion.
Mr. Salsbury said Jackson National has been the top provider of variable annuities for the past three years, with $12 billion of total sales. "These same strategies are the ones that have helped Jackson generate over $12 billion in sales. Advisers who are fans of those products were increasingly asking us to have the same story available outside of a variable-annuity wrapper."
Given the trend toward open architecture and away from proprietary funds, analysts said they were surprised a company such as Jackson National would introduce its own fund family.
Mr. Salsbury said it carefully weighed industry trends and the costs associated with running the funds before launching them.
"These products represent an opportunity for us to add assets and a whole new group of advisers that don't sell variable annuities but are interested in working with Jackson National," he said.
There are companies, particularly banks, that "may open doors to us because we are now a more holistic provider," Mr. Salsbury said. "Now we don't just offer variable annuities and life insurance but mutual funds too."
Analysts said a mutual fund family must accumulate at least $5 billion of assets under management to be profitable.
Mr. Salsbury said he is confident Jackson National can succeed with its mutual funds. "If we satisfy the demand of advisers, we'll see an adequate amount of assets to justify having formed these funds, and we'll see our new adviser ranks grow as folks that don't sell variable annuities join our ranks."
The insurer will consider launching additional mutual funds as well as other products, he said. "We are going to get our feet wet here, and we'll monitor how we do with this and adjust accordingly."
