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Insurers Warming Up To ETFs in Fixed Income and Alternatives Space
A recent article on ETF.com indicates that insurance companies are beginning to consider ETFs, especially for their fixed income allocations, which typically can make up a large portion of an insurer’s investment portfolio in their general account. Fixed income ETFs offer some advantages over individual bonds, primarily liquidity and lower spreads. ETFs also helps insurance companies reduce the number of holdings in their portfolio while replicating their existing bond... -
8 Myths of Collective Investment Trusts
BenefitsPro has published an article written by Marlene Satter covering the 8 Myths of Collective Investment Trusts (CITs). The 8 myths are: Myth 1: CITs are exactly like mutual funds. Myth 2: CITs have a lower level of regulatory oversight than mutual funds. Myth 3: Undocumented CITs lead to uninformed decisions. Myth 4: High account minimums put them out of reach for all but large plan sponsors. (Most CITs,... -
Excessive Fee Lawsuit To Affect Retirement Plans
The ongoing litigation in Tibble vs. Edison reached the Supreme Court recently in a dispute over the high cost of retail mutual fund share classes in 401(k) plan when lower cost institutional share classes were available. The defendants argue that the statute of limitations alleging the fiduciary breach had expired. The case serves as a reminder that Plan fiduciaries should review plan investments each year to see if there... -
ETF.com Award Winners Announced
ETF.com announced its 2014 award winners at its annual banquet held in New York City on Thursday. Endowment IndexTM calculated by Nasdaq OMX® was a finalist for Index of the Year. The Index of the Year award went to the Bloomberg U.S. Dollar Spot Index. Other category winners included: ETF of the Year: Wisdom Tree Europe Hedged Equity Fund (HEDJ) Best New ETF for 2014: Market Vectors China AMC... -
Collective Investment Trusts for 401(k) Plans Becoming More Popular
A recent article titled “US Mutual Funds Cut Expenses by Shifting Billions To Trusts” discusses the growing use of Collective Investment Trusts (also known as Collective Investment Funds, CITs or CIFs) based upon their lower cost structure. A few excerpts: Assets in CITs are surging because they can have significantly lower overhead costs than the average mutual fund. CITs can only be offered to qualified retirement plans such as 401(k)s... -
Endowment IndexTM Named A Finalist for Index of the Year for 2014 by ETF.com
MARCH 11, 2015 08:53 AM EASTERN DAYLIGHT TIME APPLETON, Wis.–(BUSINESS WIRE)–The Endowment IndexTM (symbol: ENDOW) calculated by Nasdaq OMX®, has been honored as a finalist for “Index of the Year” by ETF.com for 2014. The rules-based Endowment IndexTM tracks the performance of the average university and college endowment portfolio. The Index represents the investable opportunity for managers of portfolios that utilize the Endowment Investment PhilosophyTM by incorporating alternative investments within their... -
Institutional Investors Double “Smart Beta’ Exposure
Institutional investment clients of Towers Watson doubled their allocation to smart beta strategies over the past two years to $40 billion. The firm sees the continued strong demand for smart beta strategies broadening beyond equities, particularly in the bond market. Towers Watson’s clients include pension funds, sovereign wealth funds, endowments, foundations and insurance companies. -
How does your 401(k) balance compare?
Average 401(k) Account Balance by plan member’s age and years of work (as of 12/31/2013) Age Years worked Average 401k Balance (in $) 20s 5-10 $18,351 30s 10-20 $66,139 40s 20-30 $154,228 50s Greater than 30 $252,418 60s Greater than 30 $248.397 Source: Employee Benefits Research Institute -
Institutional Plan Sponsors Investment Decisions
A recent study using a dataset of 80,000 yearly observations of institutional investment product assets, accounts, and returns for 24 years (1984−2007) indicate that that plan sponsors may not be acting in their stakeholders’ best interests when they make rebalancing or reallocation decisions. Investment products that receive contributions subsequently underperform products experiencing withdrawals over one, three, and five years. For investment decisions among equity, fixed-income, and balanced products, most of... -
White House Memo Makes Case for Fiduciary Standards for Brokers Advising 401(k) Plans
If a White House memo from Jason Furman, Chairman of President Obama’s Council of Economic Advisors is any indication, brokers advising 401(k) plans will soon be under a fiduciary standard, which would require them to act in the Plan’s best interest, and not a “suitability” standard, which currently exists. If such a plan were implemented, then revenue sharing or payments received for selling certain funds will no longer be permissible. ...