According to a recent press release, the addition provides plan participants with the advantages of both active and passive portfolio management. Brinker Capital will be offering the funds in collaboration with their recordkeeper, Professional Capital Services, LLC. The new program is already available to Brinker clients.
The release stated that asset allocation within each portfolio is divided into fixed income, real assets, absolute returns, domestic equity, private equity and international equity, and that exposure to alternative investments is directly related to investor risk tolerance. Mutual funds will be used where appropriate ETFs are not available or where active management has a significant competitive advantage.
The ETFs are based on strategies with graduated levels of risk and reward, including:
- Defensive: Predominately fixed income with a small equity component and some exposure to alternative asset classes.
- Conservative: Low volatility with some growth potential.
- Moderately Conservative: Moderate level of volatility with the opportunity for long-term growth of capital.
- Moderate: Long-term capital appreciation with a moderate level of volatility.
- Moderately Aggressive: Maximize long-term capital appreciation.
- Aggressive: Heavily allocated to equity, with smaller allocations to fixed income and alternative asset classes.
- Aggressive Equity: Mostly investments in equity, with a small allocation to alternative asset classes.
“Over the past several years, ETFs have become one of the fastest-growing segments of the asset management industry and are an increasingly popular investment vehicle for both professional and retail investors,” said John Coyne, president of Brinker Capital, in the announcement. “Despite this popularity, not many retirement plan managers have figured out a way to incorporate ETFs into 401(k) plans because of trading complexities. After years of research and a technology build-out, we’re pleased to be offering these investment vehicles in our Defined Contribution plans.”