However, the increasing “narrowness” of the sources of return in broad market indexes is concerning to MFS experts.
Findings suggest the opportunity is ripe for smart beta ETF products, but more industry education is needed.
With strong November returns, the Wilshire 5000 U.S. equity index extended an unprecedented run of consecutive monthly gains.
The idea is relatively simple: workers who do not yet have emergency savings will be directed to first fund a short-term savings account reserved for emergencies, before funding their retirement account.
Some are building proprietary investment models.
EY says the move from active to passive investing is one of them.
Today, only 69% of assets in retirement plans are in actively managed funds, down significantly from 84% in 1996.
The consultancy identifies 10 investment-related terms rendered outdated by change.
Together, defined benefit (DB) plans and nonprofits continue to represent the majority of the assets under management of outsourced chief investment officers (OCIOs) polled by Cerulli Associates.
Wilshire’s data shows this was the best one-year return since the year ending June 30, 2014; that year ended with a 15.51% median return and a third consecutive quarter to post an annual return above 10%.
Respondents across all three generations cite saving and investing for retirement as their primary financial goal; however, Millennials are less inclined to buy and hold for the long term.
A relatively large allocation to international equities in Public Funds helped them beat out returns for Corporate ERISA plans and Foundations & Endowments, according to Northern Trust.
NEPC says pension plan sponsors' expected returns are unrealistic.
Across mutual fund and collective investment trust target-date products, the top-three managers own 62.6% of the market, while the top 10 account for 88.9%.
Baby Boomers’ average 401(k) account balance in June 2007 was $115,000, but those who continued to contribute to their account saw that balance grow to $315,000 as of this past June.
While few if any investing professionals advocate for aggressive market timing, it is natural to ask the question of when the bull markets could cool—and how investors might respond now to address potentially uncompensated risk in their portfolios.
When asked about the investment approach that best aligns with their retirement savings objectives, the top choice overall for 30% of women was a mutual fund with a track record of outpacing the stock market over the long term.
“The primary source of growth can be explained by the fact that CITs often are priced lower as compared to mutual funds of similar strategies,” says an analyst at Cerulli.
Choosing passive investments is a clear and simple way to reduce fees; however, choosing the fund with the cheapest expense ratio does not “equate to checking the fiduciary box,” Cerulli warns.
Recordkeepers widely identify “reducing plan administration costs” and “maximizing participant savings” as the top two priorities for defined contribution plan sponsors; CITs are also a big focal point.