Products March 23, 2017

Hartford Funds to Release Fixed Income ETFs

The new funds will leverage the research and portfolio management expertise of sub adviser Wellington Management Company.
Reported by

Hartford Funds has released actively managed exchange-traded funds (ETF) based on fixed income. The Hartford Quality Bond ETF and Hartford Corporate Bond ETF will be sub advised by Wellington Management Company. Both products will leverage the firm’s fixed income research and portfolio management capabilities.

Hartford Funds describes the Hartford Quality Bond ETF as a conservative core bond fund with an emphasis on investment grade debt including U.S. Governments and mortgage-backed securities. The Hartford Corporate Bond ETF offers corporate bond exposure through a bottom-up strategy of predominantly investment grade corporate bonds and seeks to provide total return, with income as a secondary objective.

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“In response to advisers’ call for a broad range of investment options, we’ve decided to further diversify our ETF lineup and enter the actively managed ETF space with two fixed income products,” explains Vernon Meyer, chief investment officer of Hartford Funds. “By fusing our ETF capabilities with the investment skill of Wellington Management, we are looking to maximize the value Hartford Funds can offer to investors.”

The move follows other efforts by Hartford Funds to push deeper into the ETF space following its acquisition of Lattice Strategies and its release of a U.S. real estate ETF.

For more information about Hartford Funds products, visit hartfordfunds.com.

Data and Research March 23, 2017

Bulk of Target-Date Funds in Retirement Accounts

Eighty-eight percent of target-date mutual fund assets were held through defined contribution (DC) plans, ICI finds.
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As of December 31, 2016, target-date mutual fund assets totaled $887 billion, up 1.5% in the fourth quarter and up 16.3% for the year, according to data from the Investment Company Institute (ICI).

Retirement accounts held the bulk of target-date mutual fund assets: 88% of target-date mutual fund assets were held through defined contribution (DC) plans (67% of the total of DC plan assets) and individual retirement accounts (IRAs) (20%) at year-end 2016.

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Total U.S. retirement assets were $25.3 trillion as of December 31, 2016, up 1.4% from the end of September 2016 and up 6.1% for the year. Retirement assets accounted for 34% of all household financial assets in the United States at the end of 2016.

DC plan assets were $7.0 trillion in the fourth quarter of 2016, up 1.3% from a revised estimate of $6.9 trillion in the third quarter of 2016. Government defined benefit (DB) plans—including federal, state, and local government plans—held $5.5 trillion in assets as of the end of December, a 2.4% increase from the end of September. Private-sector DB plans held $2.9 trillion in assets at the end of the fourth quarter of 2016, and annuity reserves outside of retirement accounts accounted for another $2.0 trillion.

Americans held $7.0 trillion in all employer-based DC retirement plans on December 31, 2016, of which $4.8 trillion was held in 401(k) plans. In addition to 401(k) plans, at the end of the fourth quarter, $550 billion was held in other private-sector DC plans, $905 billion in 403(b) plans, $282 billion in 457 plans, and $467 billion in the Federal Employees Retirement System’s Thrift Savings Plan (TSP).

Mutual funds managed $3.0 trillion, or 63%, of assets held in 401(k) plans at the end of December 2016. With $1.8 trillion, equity funds were the most common type of funds held in 401(k) plans, followed by $835 billion in hybrid funds, which include target-date funds.

IRAs held $7.9 trillion in assets at the end of the fourth quarter of 2016, up 1.1% from the end of the third quarter. Forty-seven percent of IRA assets, or $3.7 trillion, was invested in mutual funds, predominately in equity funds ($2.0 trillion).

The quarterly retirement data tables are available at “The US Retirement Market, Fourth Quarter 2016.”

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