Fund holds breath on status of investments

Shock waves from Monday’s upheaval in the American financial system could have dire implications for the NMI Retirement Fund’s investment portfolio and could result in—at a minimum—tens of thousands of dollars in losses.

Already, the meltdown has wiped out an estimated $700 billion from retirement plans, government pension funds and other investment portfolios nationwide, according to an Associated Press report.

At the moment, though, the Fund is still awaiting word from its money managers to get a clearer picture of what impact the meltdown will have on its investments.

Fund administrator Mark Aguon said they are in constant communication with the Fund’s money managers, who should have the numbers before Friday.

“Right now, we’re polling our money managers, and we should know by the end of the week,” he said yesterday.

The carnage began after investment bank Lehman Brothers filed the largest bankruptcy in American history Monday. A second storied bank, Merrill Lynch, was sold to Bank of America. Both are casualties of the financial crisis that began to bubble up from billions of dollars in rotten mortgage loans that have crippled the balance sheets of one bank after another.

Aguon acknowledged that some of the Fund’s investments are with Lehman Brothers but said this constitutes a minute fraction of the Fund’s total portfolio.

“I can’t even tell you if we lost anything because the part of our investment that is in Lehman is in a division that may not have lost anything,” he said.

When pressed for numbers, Aguon said the loss could amount to “less than $100,000.”

According to the Fund’s most recent financial figures, its investment portfolio totaled $449.57 million in May 2008.

Aguon pointed out that a loss is almost inevitable, considering that the entire stock market went down. The Dow Jones industrial average lost more than 500 points, its steepest point drop since the Sept. 11, 2001, attacks.

Aguon expressed confidence, though, that any loss in the Fund’s portfolio could be mitigated by the good performance of its money managers.

“Our money managers usually beat the benchmarks, they usually beat it 90 percent at any given point. We’re confident that our managers have not lost too much,” he said.

He said the Fund’s money managers are keeping the Fund updated on what’s happening on Wall Street. “They’re faxing us all the information, the effect of the drop on the S&P, etc.”

The Fund has nine money managers—Atalanta, Stralem, Renaissance, Nicolas-Applegate, Fisher, Templeton, Richmond, Income Research, and JP Morgan—all supervised by Merrill Lynch.

There was no response as of press time to a follow-up e-mail interview with Aguon on the impact of Merrill Lynch’s sale to Bank of America in its management of the Fund’s investments.

Majority of the Fund’s investments are in equities. The rest are spread out among fixed income instruments: Core, Treasury Inflation-Protected Securities, and alternative investments. [B][I](With AP)[/I][/B]