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Nationwide Funds launches Nationwide Inflation-Protected Securities Fund


Nationwide Funds has launched a new mutual fund, the Nationwide Inflation-Protected Securities Fund.

The fund, which is sub-advised by Nationwide Asset Management, was established to provide investors with inflation protection as well as a liquid and low-risk investment option that can offer additional diversification.

“Inflation protected securities play a crucial role in lowering volatility in an investor’s long-term asset allocation strategy,” says Michael Spangler (pictured), president of Nationwide Funds Group. “The Nationwide Inflation-Protected Securities Fund provides an additional hedge against future inflation without requiring investors to take on additional credit risk.”

The most common inflation-protected securities are Treasury Inflation Protected Securities (TIPS), US Treasury-issued fixed income securities that generate income and offer inflation-adjusted interest and principal payments. TIPS follow a designated inflation index such as the Consumer Price Index and apply a fixed coupon rate to their principal, causing the principal value and interest payments to increase as inflation rises.

The Nationwide Inflation-Protected Securities Fund will primarily invest in TIPS because they have a lower risk profile and, when used in a portfolio with other investments, can help diminish overall portfolio volatility. As a result, the new fund will also act as an underlying fund option in which the Nationwide Target Destination Funds may invest in order to obtain greater TIPS exposure.

“This new fund both broadens the reach of our product offerings and allows investors in our Target Destination Funds to achieve better volatility management. We feel investors will benefit from the additional diversification and potential protection from inflation they can achieve by investing in the Nationwide Inflation-Protected Securities Fund,” says Spangler.

The Nationwide Inflation-Protected Securities Fund A Shares require a minimum investment of USD2,000 and are expected to have an annual expense ratio of 0.80 per cent.

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