Seligman Advisors, Inc. has combined target-date funds with exchange-traded funds, offering investors a more cost-effective portfolios.
“ETFs are a proven investment vehicle that provide extraordinarily broad and cost-effective diversification,” said Charles Kadlec, managing director of J. & W. Seligman & Co. Incorporated, president of Seligman Advisors, Inc., and co-portfolio manager of the funds. “Target-date funds, which systematically shift allocations over time from historically more aggressive to less aggressive asset classes, provide a highly efficient means of implementing and following an asset allocation strategy.”
Kadlec claims the funds allow investors to be less restricted by time contraints, saving the investors from making hasty mistakes.
“Time is a powerful source of diversification, and that insight can allow an investor to take advantage of asset classes that historically are more volatile over short time frames but have outperformed less volatile asset classes over longer holding periods,” Kaldec said. ” An investor following such a strategy is less likely to make classic investment mistakes like chasing last year’s winner or giving up the potential for higher long-term returns in exchange for the apparent short-term safety of a so-called conservative investment.”
The porfolios consist of the following three funds: one who is retired or expects to retire within a short time or otherwise intends to seek withdrawals from invested assets; a fund intended for a person expecting to retire or otherwise reach his/her investment goal around the year 2015; and someone expected to retire or otherwise reach his/her investment goal around the year 2025.
Each fund will be structured as a fund-of-funds and will offer Class A, Class C, Class D, Class R, and Class I shares. The minimum initial investment will be $1,000 and minimum subsequent investments will be $100.