As global economies change rapidly and investors increasingly seek alternative funds where they can put their money, The Hartford Mutual Funds has launched three new funds sub-advised by Wellington Management Co. that offer investors global exposure.
Launched on June 1, the three new funds are The Hartford Global Real Asset Fund, The Hartford Global All-Asset Fund, and, The Hartford International Value Fund. The Hartford Mutual Funds will host a conference call for advisors about the new funds on June 22.
"We're early in the game, but we're already seeing investors express a lot of interest," said John Diehl, senior vice president of The Hartford Financial Services Group Inc.'s retirement division, in an interview. "Given the accelerated volatility in both the U.S. and international stock and bond markets, investors are interested in asset classes that can add greater portfolio diversification that protects against inflationary trends."
The new funds' asset allocations are based on where The Hartford Mutual Funds has seen investors seeking to put their money in the past year or two. Specifically, they want safe-harbor investments that do not correlate with volatile market movements in stocks and bonds.
"Investors are seeking alternatives to dampen the volatility in traditional stock and bond markets," Diehl said.
At the same time, he noted that The Hartford is not telling its investors to move all of their money out of domestic stocks and bonds.
"The traditional stocks and bonds we offer across our family are still in great demand," Diehl said. "Investors should look at these new funds as a diversifier and a complement to traditional funds."
Mutual funds that invest in alternative assets are becoming more popular in recent years, and they're not just a niche anymore, he added, pointing to the importance of non-correlating asset classes. Historically, non-correlating assets don't move in lockstep with traditional stocks and bonds. So while rising interest rates are bad for bonds, they're generally good for gold because commodities rise in price when inflation rises.
A recent study by mutual fund research firm Strategic Insight, "The Strategic Insight 2009 Fund Sales Survey: Perspectives on Intermediary Sales by Distribution Channel and Share Class" mirrors Diehl's observation. Among its findings on fee-based fund sales, the study shows an increasing demand for mutual funds with alternative or uncorrelated investment strategies. Investors poured more than $110 billion into alternative strategies last year.
