Stockback Replaces Investment Option For Credit Card
April 22, 2002
Stockback Capital has selected a mutual fund for its credit card program that allows investors to automatically reinvest a portion of their purchases.
Stockback, which offers a co-branded credit card along with JP Morgan Chase, has selected the Merrill Lynch S&P 500 Index Fund.
In March, Stockback and JP Morgan Chase launched the credit card, which allows consumers to earn 1% cash back on all purchases. Consumers have the option of keeping that money on their card or investing it in a fund. At that time, the two companies had selected the Stockback Fund, a fund that Merrill Lynch created specifically for the credit card program.
But three days after the announcement of the new card, Stockback filed a preliminary proxy statement with the Securities and Exchange Commission seeking to liquidate the fund (see MFMN 4/1/02).
Stockback sought to liquidate the fund because it wanted to find a fund with lower expenses, Gerri Gussin, a spokeswoman for Stockback, said at the time. Stockback Advisers of New York, the fund's investment adviser, could not afford to cover the fund's expenses under the current administrative agreement. Also, the fund had not gained the assets that were expected and simply had not reached a level at which it could stay afloat, according to the SEC filing.
Now that Stockback has selected the Merrill Lynch S&P 500 Index Fund as investment option, Stockback Fund shareholders will receive the value of their fund shares to reinvest in that fund.
"We're excited to offer cardmembers the option to invest their rewards in the Merrill Lynch S&P 500 Index Fund," said Robert Feidelson, CEO of Stockback. "Merrill Lynch is a name that people know and trust, and S&P 500 Index funds are widely held and well known to mutual fund investors."