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 […]
ETF Investor Psychology
To be successful at anything, requires discipline. In athletics, you must train your body to make certain movements at certain times so that during competition, those movements become second nature and you can perform them without thinking. To be healthy, one must be disciplined to eat right and get proper exercise. And to be successful, […]
Investors in this iShares Frontier ETF face unusually high capital gains obligation
One of the reasons ETFs have been adopted so widely is that ETFs are typically very tax-efficient investments, especially when compared to mutual funds, because their structure typically allows them to avoid shareholder distributions. The operative word in the opening sentence is typically. This year, one particular ETF, the iShares MSCI Frontier Markets 100 ETF […]
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 […]
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 […]
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 […]
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 […]
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 […]
The Value Add of Smart Beta
ETF Model SolutionTMs incorporates fundamental indexing (smart beta) strategies in our models where appropriate, including our Endowment Collective Fund, as we see potential to add value and enhance our risk-adjusted returns. The two founders of AQR Capital Management recently wrote piece about smart beta in which they categorize each of the types of approaches and describe how they […]
DC Plans Can Benefit by Adopting DB Plan Best Practices
A presentation by Robert C. Merton at Plan Sponsor Council of America’s 2014 National Conference highlighted several best practices used by defined benefit plans that could be adopted by defined contribution plans to help improve plan outcomes. The two areas of focus were on communication with participants and on investment selection. For example, since […]
