The managers of a newly launched Nashville-based mutual fund say their product's balanced approach will be more reliable than the typical actively managed fund.
7Twelve Advisors, which is based out of 1720 West End, uses a strategy developed by BYU professor Craig Israelsen for its 7Twelve Balanced Fund (Ticker: SEVNX). The fund invests evenly in seven asset classes — U.S. stocks, international stocks, U.S. bonds, internaitonal bonds, real estate, commodities and cash — and divides its assets into 12 equally weighted index-based funds.
Isrealsen calls the model "a straight-forward and transparent recipe for building a balanced fund. It's based on repeatable simple logic, not special skill." He is advising the fund and serving as its chief investment officer, while local financial executive Andy Martin running 7Twelve on a day-to-day basis. Before setting up 7Twelve, Martin was a principal at AIG Financial Advisors in Nashville. He also is a registered principal at Girard Securities out of San Diego.
"The market losses of 2008, and the nine years preceding it — the worst 10 years in market history — showed us that stocks and bonds are not the answer to every investment question. True diversification comes from investing in each of the major asset classes."
The fund is available now in 12 states. Its fees have been capped at 1.25 percent through at least May of 2012.