Baron Funds Launches Retirement Income Fund
July 7, 2008
Baron Funds has launched a no-load mutual fund that invests in small and mid-cap growth companies and aims to provide shareholders with income that outpaces inflation.
The Baron Retirement Income Fund will resemble an endowment and pay a minimum distribution of 4% of net assets per share each year, characterized as dividend income, capital gains, or return of capital, or a mixture of the three, which investors may receive or reinvest.
“Prices for most goods are doubling every 15 years due to inflation, [which is] a real problem for retirees,” said Ron Baron, the fund’s manager and the founder of Baron Capital Group. “With Baron Retirement Fund, when investors take the distribution in cash, our goal is to increase the value of an investor’s shares and the distribution at least 100% every eight years.”
For shareholders who reinvest the distribution, Baron’s goal is to double their investment every five years. It is expected that a portion of the distribution each year may consist of a non-taxable return of capital, which reduces cost basis.
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