“[When] investors commit to consistent investment regimes, investor returns are strong and the gaps are often positive," Morningstar says.
Vanguard says it periodically reviews its investment menu
Vanguard believes it’s an important part of due diligence to consider custom options.
Data from Morningstar demonstrates variable annuity net assets fell 1.6% to $1.95 trillion during the first quarter of 2018, versus fourth quarter 2017 net assets of $1.99 trillion; still, experts anticipate sales to recover as regulatory pressure and uncertainty ease.
According to Jake Tshudy at SEI, “An actuarial valuation approach akin to a DB plan is the best strategy to determine if a TDF series has the appropriate level of risk based on a plan’s demographics.”
Target-date fund designs should take into account the risks retirement plan participants face—how to correlate and corral the evolving sources of market, event, longevity, inflation and interest rate risks.
Given some of the strong language used to warn retirement plan fiduciaries against placing other interests ahead of the financial benefit of their participants, the latest DOL bulletin on the topic of ESG investing has created some confusion.
A global bond allocation hedged for currency risk can result in greater risk-adjusted returns than an allocation to local-only bonds, a report says.
There is some lingering uncertainty about the role of smart beta institutional investing, as more than 50% of asset owners in the U.S. say they remain uncertain on the best approach for their particular purposes.
However, an analysis from Alight Solutions found users of managed accounts see higher returns, are more diversified and save more in their DC plans than TDF users.
Corporate and health care plans fared the worst, with quarterly returns of -1.14% and -0.71%, respectively.
Wilshire TUCS first quarter returns were weighed down by losses across all major asset classes.
Expense ratios of target-date mutual funds averaged 0.44% in 2017; since 2008, ICI explains, the expense ratios of target-date mutual funds have fallen 34%.
PLANSPONSOR speaks with John Diehl, senior vice president of strategic markets for Hartford Funds, on the subject of equity market volatility and ways to help ease plan participant concerns amid big price swings.
BlackRock Managing Director Anne Ackerley, in conversation with PLANSPONSOR, explains new opportunities to deliver retirement income solutions to plan participants, including through the QDIA.
Equity prices have strongly recovered since the Great Recession, bringing some benefit to corporate pension funded status, but pension plan sponsors have still faced periods of unprecedented volatility, a prolonged slowdown in global growth, and historically low interest rates.
Willis Towers Watson researchers present various opportunities “outside of traditional hedging assets other than long corporate credit that may be added to [pension funds'] hedging portfolios to help provide a diversifying source of long-term credit premia.”
Morningstar estimates that investors saved more than $4 billion in fund fees in 2017 by continuing to gravitate toward lower-cost funds.
A TDF may invest its assets into index-based securities that do not make tactical adjustments as the markets change—but the act of managing even an index-based portfolio according to a glide path that ramps down equity risk over time will always be at least in part fundamentally “active.”
The report creates a watch list of investment managers that invest millions of dollars in companies that make assault weapons.