More and more investment advisors are ditching big brokerage houses to start their own firms, and, namely, their own fund families. Ralph Parks Investment Group, a registered investment advisory which opened its doors in November, has similar ambitions. The firm, formed by a pair of former Smith Barney investment advisors, is planning to launch the first of four proprietary mutual funds by the end of the first quarter. The no-load mutual funds will include a long/short domestic fund, and international funds based on the economies of India, Germany, and Great Britain. A fee structure hasn't been established but it will hover around 3%.
| Gina Griffo |
Gina Griffo: They're no-load mutual funds. The first fund we're planning to launch in the later part of March is a long and short fund. The other funds, which will be launched throughout 2006, will be India, Germany and Great Britain. The first will be domestic and, in case the market changes, and at some point we need to do some shorting, we will be able to do that within that fund. Hopefully it will give us some better performance.
II.com: Why limit the international funds to these three economies?
GG: These are areas that have a lot of growth...their markets are very attractive.
II.com: Why select specific economies over an international fund or an emerging markets fund that could give you broad exposure to several growing markets?
GG: It's nice to be targeted, and if you're in an area that is growing, you're going to get better performance. Some of the China funds over the years have done very well. There have been other Germany funds, which we've looked at that had really good performance because they are specified to one area in an economy, or in a country that has great growth.
It makes sense to be in that direction. Why not be where the growth is?
II.com: What are the fund's performance targets?
GG: [The firm] is working on putting numbers together that reflect our overall performance totals for the prior year. But Ralph's personal target is 20% a year. In most cases we've done that. His portfolio history for 10 years is 19% after the fees.
II.com: Do you intend to build an entire fund family from this?
GG: This is just the beginning. As we launch the first one and get the next three out, 2007 could see another group of eight or more specialized funds. Maybe more broader-focused funds. But the goal is to grow a fund family.
II.com: Why leave Smith Barney?
GG: When we were with Smith Barney we functioned as an independent firm under the Smith Barney name. We paid for all of our own research, our own technology. It seemed natural to move in that direction. It also enabled us to launch a series of funds. We couldn't do that when we were employed at Smith Barney. With all of those things in consideration, why not go independent?
II.com: Were you and Ralph Parks a team at Smith Barney?
GG: Yes. On Nov. 11, we resigned from Smith Barney, and we were officially in business on Nov. 12. Ralph Parks and I worked together for six or seven years; I worked for Barney for eight. The position title was portfolio management associate. Ralph did the stock selection piece and I executed the trades and made sure [our clients'] portfolios are well-diversified and not overbalanced in any of the sectors. I will be working with Ralph on that piece of it again with the clients that followed us.
II.com: It's still rare to speak to women in your position. Why is that?
GG: I have to wonder. I think a lot of women get very intimidated by numbers. I love what I do — working with clients and giving them the balance they need in their life and their financial positions... It's exciting.
II.com: Did you always want to be involved in finance?
GG: Initially my dream was to be a psychologist. At some point, I wanted to help people get through their challenges in life. When I took the job at Smith Barney...it just seemed like a natural progression.
II.com: Do you leverage that with clients?
GG: I think I have a little bit of an advantage because sometimes women feel more comfortable working with women. Hopefully that gives us an advantage with the funds and other things that we do. We have a good women client base.
