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...

Use of Liquid Alts Growing in Self-Directed IRAs

A recent article at WealthManagement.com discussed that interest in self-directed IRAs is growing.  A few reasons for this are that more people have begun to accumulate sizeable assets in their retirement plans. and are looking to diversify their portfolios beyond stocks, bonds and mutual funds.  As such, there tends to be a greater appetite for alternative assets such as real estate, precious metals, commodities, limited liability corporations and hedge funds. A...

ETF Model Solutions^TM in the News: Tactical Allocation Funds Prove Market Timing Is Just Hype

Tactical Allocation Funds Prove Market Timing Is Just Hype October 10, 2014 ETF Model SolutionsTM Chief Investment Officer, Prateek Mehrotra was published in an article on Seeking Alpha today discussing the poor results that tactical mutual fund managers have delivered to their investors.  The article discusses that in general, because of high fees and poor returns, investors would be better served by maintaining a pre-set allocation and periodically rebalancing. ...

Why have some target date funds recently increased their equity allocation?

Blackrock, Fidelity and Pacific Investment Management Co have increased their equity allocation within their target date funds in the past year.  These shifts have consultants, advisors and analysts questioning not only the reasons behind the move, but the potential consequences, especially if the recent market correction would expand.  A few excerpts: “The shared characteristic these funds have is they have not been doing so well since 2008. The question is...

Citigroup 401(k) Plan participants suit allowed to move forward

Suit alleges plan fiduciaries violated ERISA by offering affiliated funds that charged higher fees. A U.S. District Court judge in New York is allowing a participant lawsuit against plan fiduciaries of the Citigroup 401(k) plan. The case is another instance of an affiliated product that charges higher fees than funds with comparable performance.  A copy of the article, titled “Court Moves Forward Citigroup 401(k) Excessive Fee Suit” appeared on PlanAdvisor...

Business Owners and Plan Sponsors: You need to be more engaged in your Plan (its the law)

Business owners and plan sponsors:  When it comes to the 401(k) retirement plan that you’ve established for your company, you need to know one thing: You (the fiduciary or plan sponsor) are working for the employees and their beneficiaries. Your main focus is them, not the company. Therefore, you want to make sure that you are paying reasonable costs for the plan, you need to make sure the...

5 Ways Participants Can Make Their Lousy 401(k) Plan Better

A recent article titled “5 ways to make your lousy 401(k) plan stellar” suggests actions that a 401(k) plan participant might take to improve if they are in a less-than-desirable 401(k) plan.  In summary, the five options are: 1. Self-directed accounts. While not offered by all plans, some of them do, and it lets you range outside the fixed menu of investment options.  Tread carefully here though. As the Dalbar studies show, most “go-it-alone”...