Morningstar Launches Retirement Payout Funds

October 25, 2008

Morningstar Investment Services has launched a new managed account service consisting of a line-up of three actively managed portfolios designed to generate retirement income over specified time horizons and risk levels.

The Morningstar Managed Portfolios Retirement Income Series contains portfolios designed for investors in three different stages of retirement—short-range, mid-range and long-range. The portfolios aim to support annual cash flows of 4%, 5% and 6% of the client’s initial assets.

The portfolios’ construction resembles that of a university endowment. Its allocations are diversified across several alternative asset classes, including global fixed-income, high-yield bonds, commodities and absolute return strategies. Morningstar utilizes Monte Carlo simulations in designing the portfolio.

“Nearly 8,000 Americans are turning 65 each day,” said Bill Harding, director of research for Morningstar Investment Services. “Financial advisors play a critical role in helping these individuals prepare for the shift from the accumulation of assets to the distribution. The Retirement Income Series delivers a comprehensive retirement strategy designed to generate a cash flow stream over an investor’s expected time horizon in retirement and protect against the risk of outliving assets.”

For more information about the Morningstar Managed Portfolios Retirement Income Series, visit http://corporate.morningstar.com/US/asp/subject.aspx?xmlfile=2666.xml.

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