"Over the years," comments Chairman, President, and CEO John Biggs, "many of you have asked us to introduce a line of mutual funds, and we're pleased to be able to respond to your requests. Its the logical next step in providing a broad range of financial products to help fill your savings and investment needs."
You can open a TIAA-CREF Mutual Funds account with as little as $250, or $25 with our Automatic Investment Plan. Our operating expense charges are among the lowest in the mutual fund industry. And our funds are managed by the experienced investment professionals who manage your TIAA-CREF retirement accounts.
TIAA-CREF Mutual Funds can be used for just about any investment goal. You can invest for your child's education, a new home, an automobile, or a wedding. You can accumulate funds to start a new business. Or you can use your mutual fund investments for emergencies, early retirement, or additional retirement income.
Six Investment Choices
TIAA-CREF's six mutual funds provide an array of choices for participants with different investment preferences and needs. Each fund has its own investment objectives, strategies, and risks. Comprehensive information on the new products is available in the company's Web site, including a prospectus, daily net asset values, total returns, and more. On-line access to personal account information and transactions is expected late this year or early in 1998.
Money Market Fund aims for the highest possible current income while maintaining liquidity and preserving capital. We strive to keep a stable net asset value of $1.00 per share, though we can't guarantee we'll be able to do so. The fund invests primarily in securities with minimal credit risk and an average weighted maturity of 90 days or less (the longest maturity is 397 days). Money market funds are neither insured nor guaranteed by the U.S. government.
Bond Plus Fund seeks high current income and preservation of capital by investing mainly in domestic and foreign investment-grade debt securities, such as bonds, notes, mortgage-backed securities, and money market instruments. For potentially greater returns, we'll invest the "plus" component primarily in private placements and high-yield securities, when appropriate.
Managed Allocation Fund seeks both capital appreciation and investment income by investing in other TIAA-CREF Mutual Funds. About 60 percent of the fund will initially be invested in the three equity funds (Growth & Income, Growth Equity, and International Equity), with the rest invested in the Bond Plus and Money Market Funds. These percentages may change from time to time when the fund manager believes that market or economic conditions warrant an adjustment.
Growth & Income Fund aims for both capital appreciation and investment income by investing in a broadly diversified portfolio of common stocks. The fund may invest in foreign securities.
Growth Equity Fund seeks capital appreciation by investing in a diversified portfolio of common stocks. It generally looks for companies with above-average sales and earnings growth that appear to be undervalued based on their earnings prospects.
International Equity Fund aims for capital appreciation by investing in the securities of issuers located in at least three countries. It does not invest in U.S. securities.
Low Cost and Affordable
"In keeping with TIAA-CREF's tradition of providing low-cost financial products, our mutual funds are very inexpensive compared with other funds," explains Dennis Foley, vice president of Product Research & Development, who spearheaded their development. "Like our retirement and insurance products, they have low operating expense charges. And because they're 'no-load' funds, you pay no sales fees or commissions when you buy, sell, or exchange shares. Over the long term, high fees can cut into your investment returns considerably."
"Besides their low expense charges, the TIAA-CREF Mutual Funds require only a small initial investment," continues Mr. Foley. "To open a TIAA-CREF Mutual Funds account, all you need is $250 to invest. Or you can start an Automatic Investment Plan with as little as $25. The low initial investment requirement not only makes our mutual funds very affordable, but also enables the average investor to invest in multiple funds for under $1,000."
Experienced Investment Management
The new mutual funds are managed by the same TIAA-CREF team that manages your retirement accumulations. We'll introduce you to our mutual fund managers in upcoming issues of the Participant.
"TIAA-CREF's long record of solid performance is directly related to the high caliber of our investment professionals," notes Martin Leibowitz, vice chairman and chief investment officer.
"Their experience, skill, and creativity are put to optimal use in finding innovative investment opportunities. And sophisticated quantitative research and specialized analytical tools, fine-tuned over our nearly eighty years of experience, help us select the most suitable investment."
While some other companies are focused on short-term gains, TIAA-CREF is committed to investing for the long term. "At TIAA-CREF, we know the value of a clear vision and a flexible, yet consistent management style," says Mr. Leibowitz. "This long-term strategic approach has earned us the reputation for making high-quality investment decisions that have resulted in some of the soundest retirement and insurance products available today."
How to Invest
First, fill out the enclosed reply card, and return it to us. We'll send you a Mutual Funds Information Kit, including a prospectus and an account application. Or you can download the prospectus and application from our Web site. After processing your application, we'll send you confirmation of your initial investment.
To learn more about the new TIAA-CREF Mutual Funds, browse the
Mutual Funds section of our Web site, or call us toll free at 1 800 223-1200,
weekdays between 8:00 a.m. and 8:00 p.m., ET. Our staff of knowledgeable
consultants can help you invest your after-tax savings and guide you through
the application process. If you want quick information about the value
of your accounts, call our Automated Telephone Service at 1 800 842-2252.