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Sponsored message from Vanguard |
A different kind of target-date investor
Cynthia Pagliaro and Stephen Utkus
Roughly 1/3rd of plan participants in target-date funds at Vanguard are “mixed” target date investors. There are concerns that mixed investors are misusing all-in -one funds and take on added risk through overlapping securities.
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Market Mirror |
Yesterday, the Dow was down 29.58 points (0.14%) at
20,924.76, the NASDAQ lost 15.25 points (0.26%) to finish at 5,833.93, and the
S&P 500 dropped 6.92 points (0.29%) to 2,368.39. The Russell 2000 lost 9.55
points (0.69%) to 1,374.69, and the Wilshire 5000 closed 89.58 points (0.36%)
lower at 24,638.00.
On the NYSE, 3.5 billion shares traded, with 2.3 declining
issues for every 1 advancing issue. On the NASDAQ, 2.8 billion shares changed
hands, with a 2 to 1 ratio of decliners to advancers.
The price of the 10-year Treasury note decreased 4/32,
bringing its yield up to 2.514%. The price of the 30-year Treasury bond fell
8/32, increasing its yield to 3.118%.
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Compliance |
State Run IRA Plans Targeted By Senate Resolutions |
Senator Orrin Hatch, R-Utah, known for his work on pension and retirement issues, introduced a joint resolution in the Senate aimed at dialing back Department of Labor (DOL) rules adopted under former President Barack Obama, which encourage states to set up defined contribution (DC) payroll deduction retirement plans for private sector workers. The language is similar to that which was introduced in the House in February.
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Connecticut Bill Targets 403(b) Provider Conflicts |
A bill introduced in the Connecticut State Legislature is aimed at implementing a state-based rule making process that will require any person who enters into a service contract or agreement with a 403(b) retirement plan and “reasonably expects to receive $1,000 or more in compensation, direct or indirect, in connection with the provision of such services,” to disclose to a fiduciary of the plan “any conflict of interest such person has with such retirement plan.”Read more > |
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Investing |
Growing Plan Sponsor Interest in Pension Risk Transfer |
Eight out of 10 employers are interested in pension risk transfer (PRT), and defined benefit (DB) plan sponsors have become increasingly interested in these products since 2014, according to a new study by the LIMRA Secure Retirement Institute. The same report found that four in 10 DB plan sponsors reported being “very interested” in PRT products, representing a 10% spike in interest compared to data gathered from an Institute study in 2014.
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In a recent paper, GMO concludes that dynamic investment allocations paired with higher-than-typical deferral rates can result in significantly better outcomes for participants—and that these are the two most important factors when selecting a TDF. GMO examined several variables considered when selecting a target-date fund—including active versus passive, level of risk, dynamic versus predetermined glidepaths and custom versus off-the shelf—and how these factors would have resulted in outcomes for the 40-year period between 1975 and 2015.Read more > |
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Small Talk |
ON THIS DATE: In 1853, the first bronze statue of Andrew Jackson was unveiled in Washington, D.C. In 1880, U.S. President Rutherford B. Hayes declared that the United States would have jurisdiction over any canal built across the isthmus of Panama. In 1894, a dog license law was enacted in the state of New York. It was the first animal control law in the U.S. In 1945, Phyllis Mae Daley received a commission in the U.S. Navy Nurse Corps. She later became the first African-American nurse to serve in World War II. In 1948, the U.S. Supreme Court ruled that religious instruction in public schools was unconstitutional. In 1965, the U.S. landed about 3,500 Marines in South Vietnam. They were the first U.S. combat troops to land in Vietnam. In 1999, the U.S. Supreme Court upheld the conviction of Timothy McVeigh for the bombing of a federal building in Oklahoma City in 1995.
WEDNESDAY WISDOM: “Either you run the day or the day runs you.” -Jim Rohn
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