Key Asset Management, the investment adviser of Victory Funds and a subsidiary of the Cleveland banking company KeyCorp, launched a fund Monday that tracks the top Nasdaq stocks.
The Victory Nasdaq-100 Index Fund gives investors access to leading high-tech stocks, but includes other industries that round out the top 100 Nasdaq stocks, said Robin Schosser, director of Key Asset Management. "It gives our investors an opportunity to get exposed to the technology-laden economy" and the opportunity "for further diversification," she said.
The fund has two classes of shares: Class A, which carry fees for getting in and out of the fund, and Class G, which have some ongoing fees but none for entering or exiting.
"We think this is a unique fund for a couple of reasons," Ms. Schosser said. First, it has a minimum initial investment of $500, against $1,500 or $2,000 for comparable offerings. Second, while the fees for similar products run from 65 to 200 basis points, the Victory Nasdaq-100 Index ranges from 60 to 80 basis points, depending on the class of shares purchased.
And "since it's an index fund," Ms. Schosser said, "it's passively managed, which means a lower overall cost and lower portfolio turnover."
The Nasdaq has had its ups and downs in recent months. Key Asset's new offering helps investors temper that volatility by spreading risk over a group of stocks, Ms. Schosser said.
"It fulfills a product void," she said, noting that this is Key Asset's first Nasdaq 100 fund and that there are only a few others. "We're looking for investors who have a certain risk tolerance, who are interested in an aggressive growth component to their portfolio."
The Nasdaq 100 index, which consists of the 100 largest nonfinancial stocks traded on the Nasdaq national market tier, has averaged a 36.85% annual return in the 1990s, according to Key Asset Management. An investment of $100 in the index 10 years ago would have grown to $1,682 by June of this year, as opposed to $412 for the Standard & Poor's 500.
The objective is for Victory Nasdaq-100 to duplicate the Nasdaq index's performance, Key said. The product is based on a modified market capitalizations index, which means the largest companies make up the largest portion of the index.
Ms. Schosser would not predict the asset levels the fund will attract, but she said it has drawn a lot of interest from the company's brokerage partners.
The fund is available through McDonald Investments, which is also owned by KeyCorp, and other brokers that sell the Victory family of funds.
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