Tuesday, March 04, 2008

New Investment for my Mom

Occasionally, I've mentioned that I advise my Mom on investing. We've now completed our allocation of funds to the Aletheia separately managed account - we initially invested the minimum $100k and then added $10k a month for ten months. Dollar cost averaging paid off with the combined value of our Aletheia and money market accounts with this firm having gained 2% while the S&P 500 lost about 5% over the same period. Aletheia is a manager of US shares. I now plan to add an international equities manager. We will initially invest $100k and then over time will likely transfer some money from our other accounts to reach $200k invested with this second manager too. We have $58k in a money market account that we could transfer right away. We also have a structured investment note that will mature this year (this is similar to the Man investment I discussed). We could move $50k of that and reinvest the rest in another alternative investment to be advised by UBS.

I recently reviewed my Mom's investments for the first time since May 2007 (my mother brought out to Australia a required security device for accessing one of the accounts). We are about flat with May 2007 currently performancewise. Everything is doing fine with one glaring exception. A Janus short-term bond fund that is supposedly down 27% since May. The only way this could be true is if they stuffed a huge chunk of the fund into short-term mortgage backed securities of dubious quality. It appears, though, that the reason the fund is down is because the price of the class of fund we own is quoted in Euros and UBS's account display is forgetting to convert this fund from Euros to US Dollars! I'm getting my Mom to follow this up with UBS. Check that your broker is using the right data if you find any discrepancies like this!

I'll report more on the international managers in another post.

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