Administration July 5, 2007

Invesmart Barometer: 58 bps "Reasonable" for Participant Annual Fees

May 31, 2005 (PLANSPONSOR.com) - Invesmart said Tuesday that its Retirement Portfolio Cost Barometer indicates that a "reasonable standard" for annual plan participant fees is 58 bps - down from 63 bps in November 2004.
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According to an Invesmart news release, the Barometer is designed help plan sponsors and participants evaluate the competitiveness of their plan investment management fees.

The announcement said that several portfolios are structured ranging from conservative to aggressive risk profiles.   The barometer is based on the most expensive portfolio within that spectrum.

“Management fees continue to head in the right direction and plan participants are the ultimate beneficiaries of these fee moderations,” said Rob Rossi, Director of Investment Research for Invesmart, in the news release.   “We still see room for fee reductions across the board.   As fund companies continue to pass along growing economies of scale to their investors, we think we’ll see fees decline further by the end of this year.”

The largest fee decreases were in the International Equity category, which dropped by 9 bps to 0.64% since November 2004, the announcement said. This represents a 12% decline over the past six months.

Following are the asset categories included in the Barometer and the average investment management fees for each:

  • Large Cap US Equity: 44 bps
  • Small/Mid Cap US Equity: 90 bps
  • International Equity: 64 bps
  • US Fixed Income: 43 bps
  • Cash Alternatives/Ultra-short Term Bonds 32 bps.

Invesmart said that to calculate the latest Barometer data, Invesmart considered the investment management fees of 67 institutional quality mutual funds selected from a universe of 2,400 funds representing 180 fund families.

More information about the company is at  http://www.invesmart.com .

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