Benefits August 23, 2007

IRA Rollover Market Makes Strong Comeback

August 23, 2007 (PLANSPONSOR.com) - The IRA rollover market grew by 38% from 2004 to 2007, rebounding from an 11% decline in assets rolled over from 2000 to 2004.
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A press release from the Spectrem Group on its new report, “The IRA Rollover Market 2007,” said assets rolled over from other retirement accounts, primarily savings plans such as 401(k)s and 403(b)s, to IRAs in 2007 stood at $489.3 billion, up from $353.4 billion in 2004.

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The number of individuals conducting IRA rollovers has also increased, up 28% to 7.4 million in 2007 from 5.8 million in 2004, the press release said. From 2000 to 2004, the number of individuals conducting rollovers fell 9%, from 6.4 million to 5.8 million.

Spectrem’s research also found that two-thirds (67%) of individuals who rolled a balance over to a personal IRA did so using a professional adviser. “In conjunction with the end of the bear market earlier in the decade, participants – especially those with balances of $100,000 or more – have clearly become more willing to roll assets over. This presents new opportunities for providers and advisers,” said George H. Walper, Jr., President of Spectrem Group, in the press release.

The report can be purchased by contacting Spectrem Group at (312) 382-8284, or by visiting www.spectrem.com .

Products August 22, 2007

Vanguard to Take over Long/Short Fund

August 22, 2007 (PLANSPONSOR.com) - The Vanguard Group has announced a proposal with Charles Schwab Investment Management to reorganize the Laudus Rosenberg U.S. Large/Mid Capitalization Long/Short Equity Fund into a new Vanguard offering.
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A Vanguard news release said the company expects the new Market Neutral Fund to appeal primarily to institutional investors, particularly endowments and foundations. The fund will require minimum initial investments of $250,000 for Investor Shares and $5 million for Institutional Shares.The two share classes will feature estimated expense ratios of 0.75% and 0.60%, respectively.

The $21-million open-end fund, which is a member of Schwab’s Laudus family of funds, is sub-advised by AXA Rosenberg Investment Management LLC, according to the release. Vanguard Quantitative Equity Group would also manage a portion of the fund.

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Laudus Rosenberg Fund shareholders are expected to be mailed a proxy statement detailing the terms of the proposed reorganization in early October. If approved at a special shareholder meeting scheduled for mid-November, the tax-free reorganization is expected to be completed by year-end 2007, according to Vanguard.

Along with the reorganization proposal, Vanguard has filed a registration statement with the U.S. Securities and Exchange Commission (SEC) for the new Vanguard Market Neutral Fund. The new no-load fund will seek to provide long-term capital appreciation while limiting exposure to general stock market risk by using a long/short market-neutral strategy.  

The new fund will assess a 1% fee on shares redeemed within one year of purchase, which is half the current charge on shares redeemed within 30 days of purchase, Vanguard said.

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