State Farm to throw its hat into the mutual fund ring
In an effort to boost growth and meet its customers' financial and insurance needs, State Farm Mutual Automobile Insurance Co. will start selling mutual funds.
|The insurer plans to offer the funds in all 50 states by March 2001.|
Dick Luedke, a spokesperson for the Bloomington, Ill.-based insurer, says the company will offer 10 mutual funds in four states — Kansas, Missouri, North Carolina, and Virgina — by January 2001 and in all 50 states by March 2001. The Securities and Exchange Commission has given State Farm permission to sell the funds. "We have a belief that our customers are very interested in this product," he says.
The funds will include three index funds — funds that mirror a particular stock index. They include a Standard & Poor's Index 500 fund, an international index fund, and a small cap index fund. Those funds will be managed by Barclays Global Investors, an asset management firm based in San Francisco.
State Farm also will offer a small cap equity fund, a large cap equity fund, an international equity fund, a money market fund, a taxable bond fund, a tax-advantaged bond fund and an equity and bond balanced fund. State Farm will set up a new unit, State Farm Investment Management Co., to manage those funds. Capital Guardian Trust of Los Angeles, another investment firm, will serve as co-advisor to State Farm on those funds.
Luedke says customers will be able to buy the mutual funds through their agent, on the Internet, or by mail. He says about half of the company's 16,000 agents are licensed to sell variable life products, including variable annuities and variable life insurance.
Additional training is needed to sell mutual funds, but the company is not sure how many agents will apply for a license to sell funds. "The incentive will be there for them," Luedke says.