New fund goes native (American) to win investors

With thousands of mutual funds available to investors, shouldn’t at least one be run by Native Americans who are committed to building Native American wealth?

That’s the question Cree Indian John Delorme asked himself before launching the 4 Winds Treasury Money Market Fund on Oct. 13.

Mr. Delorme, president of the fund’s administrator, 21st Century Enterprises Inc. in Seattle, says the money market fund is the first of five he hopes to roll out within the next few years.

He has no set timetable, but the next product will be a bond fund followed by equity offerings, he says. The fund family will be called the 4 Winds Funds.

The funds will be sold through Native Nations Securities Inc. in New York and advised by Native American Advisors Inc. in Alpharetta, Ga.

Federated Investors in Pittsburgh will co-advise and subadminister the funds.

a need to perform

Financial advisers say Mr. Delorme shouldn’t count on Native Americans’ interest just because Native Americans manage the funds. They say the fund family, starting with the money market fund, needs to do just as well as, if not better than, other established funds to attract assets.

Mr. Delorme agrees that the funds have to perform to be successful. That’s why he has enlisted Federated’s help and rolled out a money market fund first.

“A money market fund is a very basic vehicle, but it’s a vehicle that gets us into this,” Mr. Delorme says. “For now we’re taking baby steps, and our first is this money market fund.”

But coming out with a money market fund is hardly a bold move and may actually backfire, says Jeff Feldman, a financial adviser with Rochester Financial Services in Rochester, N.Y.

“I don’t know what the big attraction of a money market fund would be,” Mr. Feldman says.

“I don’t think anyone’s going to put money into a money market fund with nothing else available. They probably should have their other funds up and running soon if they want people to start giving it a try.”

Mr. Delorme, however, says a money market fund is the best investment vehicle for many of the more than 500 Native American tribes he sees as potential investors. He says the different tribes have different financial needs, but most are ready for a money market fund.

Mr. Delorme says the fund is open to tribes as well as individual investors but because the fund requires an initial investment of $50,000 he’s mainly targeting tribes.

“Some of the tribes are interested in moving toward an equity fund,” Mr. Delorme says. “Some of their needs revolve around a bond fund. We’re just trying to see where we have to go from here.”

Enlisting Federated should help build confidence in the new funds, Mr. Delorme says. Federated will handle the back-office operations and will provide the fund group with additional direction.

Federated was chosen to help build the 4 Winds Funds, in part because of its role in the creation of fund groups for the Lutheran Brotherhood in Minneapolis and the AARP in Washington.

Jeff Sterling, a vice president with Federated, says that the mutual fund company got involved with the 4 Winds Funds project because it believes in the long-term viability of the fund group.

The viability of any fund group, however, rests with its ability to gather assets. Mr. Sterling says he hopes the 4 Winds Treasury Money Market Fund will collect between $250 million and $500 million in assets its first year.

interest indicated

If that doesn’t happen, Federated and others involved will have to examine why more people aren’t interested, Mr. Sterling says.

Mr. Delorme says the preliminary indications are that Native American tribes are interested in the fund and the idea of a fund group run by Native Americans.

He says the Congress of Native American Indians in Minneapolis last month warmly received fund representatives.

Mr. Delorme stresses that Native Americans are not the only ones who can invest in the 4 Winds Treasury Money Market Fund.