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Performance Disparities between DB and DC Plans due to Real Assets, Emerging Market Equity, and Alternatives Exposures
BNY Mellon’s Investment Strategy and Solutions Group conducted research resulting in a report that provides detailed analysis on the performance disparities between Defined Benefit and Defined Contribution Plans. A few excerpts: Broadening the DC universe to include the kinds of allocations to include the kinds of allocations that institutional-quality pension plans have used for years, we believe, provides the potential for DC plans to improve their risk-adjusted return while... -
Is “30/30/40” the new “60/40”?
In an article titled, “In Alts We Trust” a recent issue of Investment News discusses how managers that are advocating 60/40 portfolios be replaced by a 30/30/40 portfolio. The premise? That high equity valuations and that low bond yields cannot provide the returns or downside protection that they afforded previously. The proliferation of liquid alts funds, which can offer good alternatives managers with reasonable fees, offer investors opportunities previously unavailable.... -
Press Release: Endowment IndexTM Historical Data Now Available Through Morningstar, Interactive Data and Bloomberg
APPLETON, Wis., Nov. 11, 2014 /PRNewswire/ Historical index data for the Endowment IndexTM — calculated by Nasdaq OMX® — is now available through major index and investment databases, including Bloomberg, Morningstar, and Interactive Data. In addition, the 30,000+ advisors on the Envestnet platform can now select the Endowment IndexTM to benchmark client portfolios. Endowment IndexTM data can be accessed through most major quote providers and websites under the symbol... -
World’s Largest Pension Fund Adds Alternatives To Their Portfolio For First Time
The second largest retirement pool of retirement savings in the world¹, the Government Pension Investment Fund, Japan (“GPIF”) recently announced a new policy asset mix for the medium-term plan. The policy change is based upon certain economic assumptions, including expectations that interest rates will rise in the next decade. In addition, the review period was accelerated due to expectations that Japan is positioned to “significantly transform itself from economy of persistent inflation”.... -
University Endowment Portfolio Managers Increase Alternatives Allocation
A preliminary report from NACUBO (National Association of College and University Business Officers) shows that university endowment porfolio managers increased their allocation to alternative investments in 2014. The preliminary study included data from over 400 institutions showed that allocation to alternative investments rose to 58% in the past year, a five point increase from the previous year. Alternative asset categories include marketable alternatives, private equity, venture capital, natural resources, distressed... -
Investment News: “Alternatives: Key Piece of the Puzzle”
The case for traditional long-only allocations to stocks and bonds is getting weaker by the day, and that’s putting the financial advice industry, if somewhat reluctantly, on the junction of major change And so starts an extensive front-page article in a recent issue of Investment News. The article goes on to provide a basic background of the growth of liquid alts with commentary from a number of advisors and asset... -
Unnallocated Deferred Annuities in Retirement Plans
One of the trends in the retirement space is to get participants focused on “income replacement” rather than “asset accumulation”. After all, once workers retire, the assets that they have must generate a sufficient income for them to maintain their desired lifestyle. Guidance from the Treasury Department and the Department of Labor within the past week has generated a lot of news on adding deferred annuities within Target Date Funds.... -
Study Sheds Light on Private Equity Holdings of Public Pension Funds
The annual Private Equity Growth Capital examining private equity investments of over 150 U.S. public pension funds has been released recently. The report contains tables and charts, organizing data collected by Bison. A few highlights: U.S. public pension funds invest 9.4% of their portfolio in private equity (on a dollar-weighted basis) Based upon the four asset broad classes they analyzed (fixed income (5.6%), public equity (7.9%), private equity (12.3%),... -
How To Invest Like The Ivy League Endowments with ETFs
Seeking Alpha published an article by Prateek Mehrotra outlining how ETFs can help investors build institutional quality portfolios diversified into liquid alternative investments designed to improve long-term risk adjusted returns. The article summary The country’s largest endowments aim to preserve capital while producing income and appreciation with less correlation to the stock market regardless of market conditions. Performance among Ivy League endowments and retirement plans that invest like them... -
United States Commodity ETF files paperwork to be registered under Investment Company Act of 1940
United States Commodity Funds, the Oakland, California-based firm that did so much to popularize futures-based exchange-traded funds focused on commodities, has filed regulatory paperwork describing a broad commodity fund that qualifies for the same tax treatment as a plain-vanilla equity or fixed-income fund. The USCF Dynamic Commodity Index Fund is being registered under the Investment Company Act of 1940, which means shareholders in the fund won’t have to file so-called...