New Fund Will Help Investors Protect Their Investments Against Inflation
MINNEAPOLIS, Oct. 4 /PRNewswire-FirstCall/ -- U.S. Bancorp Asset
Management, Inc., announced today that it has launched Class A, C, Y, and R
shares of the First American Inflation Protected Securities Fund. The Fund
will invest at least 80% of its net assets in inflation-protected debt
securities, according to management team leader Wan-Chong Kung. These types of
securities can help investors protect against inflation by adjusting coupon
payments in line with changes in inflation. In addition, they offer
attractive, risk-adjusted return potential and additional portfolio
diversification due to the low correlation of returns to other asset classes.
The Fund also avoids the phantom income tax associated with investing in
individual inflation-protected securities.
Inflation-protected securities are bonds issued by the U.S. Treasury,
corporations, or foreign governments that keep pace with inflation through
periodic adjustments based on changes in the Consumer Price Index(1). The most
common inflation-protected securities -- Treasury-Inflation-Protected
Securities (TIPS) -- carry a fixed coupon rate, and their principal value
adjusts with inflation. Interest is paid on the adjusted principal value so
that interest payments increase with the rate of inflation.
Inflation-protected securities offer a "real" rate of return compared to
traditional bonds, which maintain a fixed income stream until maturity.
"In a rising inflation-rate environment, the new Inflation Protected
Securities Fund can help investors protect their investments against the
damaging effects of inflation," said Tony Rodriguez, head of fixed income at
U.S. Bancorp Asset Management. "Based on the Consumer Price Index, consumers
would need more than $13 today to buy the same goods and services that they
purchased in 1940 for only $1. If consumers are concerned about inflation
outpacing their investment returns, inflation-protected securities could
provide a way to protect their purchasing power while at the same time
diversifying their portfolios."
Since its inception on October 1, 1997, the Lehman TIPS Index(2) has
provided favorable returns with less risk than many other investment options.
The new Fund's Class A shares will have a maximum front-end load fee of
4.25%, and Class C shares will carry a maximum back-end load fee of 1%. Each
class will include a 0.5% management fee.
About First American Funds
The First American Funds mutual fund family is the fifth-largest bank-
proprietary fund family in the United States, with more than $55.3 billion(3)
in open-end funds. The Funds are advised by U.S. Bancorp Asset Management.
About U.S. Bancorp Asset Management
U.S. Bancorp Asset Management is a national investment firm that serves as
the registered investment advisor to First American Funds and provides
customized portfolio management to private clients, corporations, public
entities, nonprofit organizations, and other institutions. The firm is the
37th-largest asset manager(4) domiciled in the United Sates and the fourth-
largest bank-proprietary asset manager(5), with more than $122 billion(3) in
assets under management. It is a performance-driven, independent-style firm,
backed by the sources and stability of U.S. Bancorp, the sixth-largest
financial services holding company in the United States, with total assets of
(1) The Consumer Price Index is a measurement used to monitor the change
in prices paid by consumers. It is also used to monitor the change
in the cost of living from one year to another. This inflation
calculation is based on the average inflation index during the
(2) The Lehman TIPS (Treasury Inflation-Protected Securities) Index
consists of inflation-protected securities issued by the U.S.
Treasury that have at least one year to final maturity, at least
$250 million par amount outstanding, and are investment-grade rated
(Baa or better).
(3) Figures are as of June 30, 2004, and are subject to change.
(4) Pensions and Investments, Dec. 22, 2003
(5) Strategic Insight, July 2004
Each Fund's investment objectives, risks, charges, and expenses must be
considered carefully before investing. The prospectus contains this and other
important information about First American Funds, and it may be obtained by
calling First American Investor Services at 800.677.FUND or visiting
firstamericanfunds.com. Read the prospectus carefully before investing.
Mutual fund investing involves risk; principal loss is possible.
Investments in debt securities typically decrease in value when interest
rates rise. This risk is usually greater for longer-term debt securities.
Treasury securities are issued by the U.S. government and are backed by
its full faith and credit. The interest payments on these securities are
guaranteed, while the Fund offers no such guarantee.
Investment products, including shares of mutual funds, are not obligations
of, or guaranteed by, any bank, including U.S. Bank or any U.S. Bancorp
(NYSE: USB) affiliate, nor are they insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency.
U.S. Bancorp Asset Management, Inc., serves as the investment advisor to
First American Funds. First American Funds are distributed by Quasar
Distributors, LLC, an affiliate of the investment advisor.
SOURCE U.S. Bancorp Asset Management, Inc.
/CONTACT: Cheryl B. Stone, Vice President, Public Relations of U.S.
Bancorp Asset Management, +1-612-303-5657/
/Web site: http://www.firstamericanfunds.com /
CO: U.S. Bancorp Asset Management, Inc.; First American Funds; U.S. Bancorp
IN: FIN MFD
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1083 10/04/2004 09:59 EDT http://www.prnewswire.com