Cerulli Associates points to active target-date fund (TDF) performance during market volatility and the ability to mitigate sequence of return risk for defined contribution (DC) plan participants as reasons to consider them.
While target-date funds (TDFs) are intended to automatically diversify retirement plan participants’ portfolios, Vanguard found nearly one-third mix TDFs with other investments and “are pursuing what appear to be reasonable diversification strategies.”
Sway research finds target-date series that invest in passively managed underlying funds, as well as those that invest in collective investment trusts (CITs) have been increasing, while target-date series that invest in actively managed underlying funds saw their market share fall.
Most 401(k) trading in the month favored fixed income investments.
The guide provides a checklist for periodic reviews, key questions to ask and items to consider.
A retirement plan’s default investment could have drawbacks for some employees.
Many participants see the match percentage as a suggestion for how much to save; the majority of participants support automatic plan features; and even participants who are hands-on with investing like TDFs, J.P. Morgan found.
SSGA is following the trend of providers lowering investment fees, and sees an opportunity to attract 403(b) plan sponsors.
Lincoln Financial creates personalized target-date portfolios; Aon Hewitt-managed pooled funds claim compliance with GIPS; Vanguard launches Global Credit Bond Fund; and more.
Morningstar warns that the distinction between "active" and "passive" target-date series has become more muddled in recent years.
In addition, Vanguard found among its book of business a large increase in the number of small businesses offering retirement plans to employees.
HSAs need to offer equities, multi-asset classes and fixed income, Devenir says.
There are a number of investment vehicles to consider when drafting a plan menu that best suits the plan's participants.
How Hearst Corp. followed a prudent process to choose its qualified default investment alternative.
“[When] investors commit to consistent investment regimes, investor returns are strong and the gaps are often positive," Morningstar says.
When constructing their own retirement portfolio, about 10% of participants still hold extreme allocations—either 0% or 100% equities.
MassMutual introduces new TDFs, and Krane Funds Advisors creates CIT for retirement plans.