XTF Introduces Mutual Fund Portfolios

XTF has introduced nine new ETF-based mutual fund portfolios, available with four pricing models, targeted for the 401(k) market and retail advisers.

According to an announcement from the asset manager, the new portfolios will be provided both through advisers and companies serving qualified retirement plans that will offer the funds on their platforms. The portfolios include: three tactical asset allocation portfolios – conservative, moderate and aggressive; four target date portfolios from 2010 – 2040+; a Country Rotation Portfolio, and a Sector Rotation Portfolio.

The three tactical risk-based portfolios – Conservative, Moderate and Aggressive – have equity exposures of 40%, 60% and 80%, respectively. The four target date portfolios – ETF 2010, ETF 2020, ETF 2030 and ETF 2040+ – are reallocated among assets annually, gradually reducing equity exposure as investors approach and enter their retirement years, XTF said.

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The Country and Sector Rotation Portfolios invest in ETFs based on specific countries and industry sectors. XTF models each country or sector independently, compares its risk/reward profile to an equivalent investment in intermediate-term U.S. Treasuries, and invests in whichever is more favorable.

The new funds will be offered based on the following pricing models:

  • Class I for the institutional market: 69 bps total;
  • Class A: includes a 12(b)1 fee of 25 bps;
  • Class R for the 401(k) market: includes a 50 bps 12(b)1 fee;
  • Class C: includes a 1% CDSC over time to the investor.

More information can be found at www.xtf.com.

SEC Announces PBHG Fund Market-Timing Distribution

Mutual fund investors dinged by the fund trading scandal are getting ready to get some pay back.

The Securities and Exchange Commission (SEC) has announced a $125 million Fair Fund distribution to more than 254,000 investors who were harmed by fraudulent market timing in the PBHG Funds between June 1998 and December 2001.

First of Three

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According to the SEC, the distribution is the first in a series of three disbursements from the Fair Fund that will distribute a total of approximately $267 million to more than 384,000 affected PBHG Funds’ account holders. The Fair Fund resulted from Commission enforcement actions charging unlawful market timing in the PBHG Funds by Pilgrim Baxter & Associates, Ltd. (PBA), Gary L. Pilgrim, and Harold J. Baxter. The SEC estimates that distributions two and three will occur before September 30, 2007.

In 2004, the Commission brought and settled public administrative and cease-and-desist proceedings against PBA, which consented to a Commission Order charging antifraud violations without admitting or denying the SEC’s findings. The SEC ordered PBA to pay $40 million in disgorgement and $50 million in penalties, and later settled administrative and cease-and-desist proceedings against PBA’s two former principals, Pilgrim and Baxter, who also consented to Commission Orders charging antifraud violations without admitting or denying the SEC’s findings. The SEC ordered them to each pay $60 million in disgorgement and $20 million in penalties for distribution through the Fair Fund.

“Of the Commission’s many responsibilities under the federal securities laws, one of the most important and indeed most gratifying is providing tangible relief to injured investors,” said Linda Chatman Thomsen, Director of the Division of Enforcement. “Today’s distribution is a significant milestone in remedying harm that investors in the PBHG Funds suffered.”

The Fair Fund provision of the Sarbanes-Oxley Act of 2002 enabled the SEC to increase the amount of money returned to harmed investors by allowing financial penalties paid by wrongdoers to be included in the distributions. Prior to the enactment of Sarbanes-Oxley, only disgorgement could be returned to affected investors. To date, the SEC has distributed more than $1 billion in Fair Fund monies, according to a press release.

Investors can obtain additional information about the distribution process, including a copy of the Distribution Plan, by visiting http://www.pbafairfundsettlements.com or by calling the Administrator of the Distribution Plan at (800) 920-5408.

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