New mutual funds to invest in Lipper ETF indexes

NEW YORK, June 6 (Reuters) - Hennion & Walsh Asset Management said on Wednesday it has launched the SmartGrowth Lipper Funds, three mutual funds that will invest in indexes of exchange-traded funds constructed by Lipper Inc.

Hennion & Walsh, a Parsippany, New Jersey-based firm, is the investment adviser to the funds. The firm has a licensing agreement with Lipper, which oversees the underlying indexes.

Lipper created the Lipper Optimal Target Risk Indices in January, using five risk profiles -- aggressive growth, growth, moderate, conservative and very conservative.

The new mutual fund are the Smart Growth ETF Lipper Optimal Conservative Index Fund, the Moderate Index Fund and the Growth Index Fund.

Kevin Mahn, chief investment officer at Hennion & Walsh, said the "fund of funds" approach of the new funds allows a blend of the principles of asset allocation with the advantages of ETFs, such as low cost, transparency, and tax efficiency.

He noted that there has been a proliferation of ETFs, with the market near the saturation point with about 500 of them available in the U.S.

He also said that the growth of asset allocation fund products since the 2000-2002 bear market has created confusion for investors.

Mahn said the new funds can be described as "target risk" funds which avoid arbitrary allocations such as 80 percent equities and 20 percent bonds used in other products.

Andrew Clark, Lipper's head of research for the Americas, said that the indexes with their current constituents use all equity ETFs, but in the most conservative index the risk profile is similar to that of a balanced fund using 60 percent equities and 40 percent bonds.

Lipper is a wholly-owned subsidiary of Reuters Group Plc RTR.L RTRSY.O.