Products April 20, 2017

Nuveen Adds Direct Real Estate to TDFs

The firm is promoting these funds as the first of its kind to offer access to direct real estate through a target-date mutual fund.
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Nuveen added access to direct real estate investments to its target-date fund (TDF) series.

The TIAA-CREF Lifecycle Funds will devote about 1% to 5% of asset allocations to real estate investments, which will be made through TH Real Estate. TIAA says these will be institutional-quality U.S. commercial real estate assets primarily tied to office, industrial, retail and multi-family residential properties. These investments will seek to generate returns primarily from rental income, with asset appreciation as a secondary goal.

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“The opportunity to include direct real estate as part of our TIAA-CREF Lifecycle Fund series allocation provides us with the ability to further diversify, reduce volatility and potentially improve investment outcomes,” says John Cunniff, managing director at TIAA Investments and portfolio manager of the TIAA-CREF Lifecycle Fund series. “We believe exposure to direct real estate alongside investments in equity and fixed income is central to building a well-diversified, long-term portfolio for investors.”

These assets have played a significant role in the investment menus of defined benefit (DB) plans for decades, but now real estate investments are becoming more visible in the defined contribution (DC) market in the form of real estate investment trusts (REITS) and direct real estate offerings in TDFs.  

A recent study by Nuveen found that incorporating direct real estate investments into target-date funds provided the potential to enhance diversification, reduce volatility, and improve investment outcomes. These assets have also become more popular in the DC space because they tend to further diversify multi-asset funds while reducing risk by exhibiting less correlation to market volatility than stocks and bonds. Nuveen also found that a 5% allocation to direct real estate improved risk-adjusted returns and retirement accumulations in most scenarios.

The findings are available for download by institutional investors and financial advisers in a new whitepaper titled, Target-Date Funds: Improving Diversification with Direct Real Estate.

Products April 20, 2017

ERISA Fiduciary Training Platform Launches

With the program, students will learn directly from David Donaldson, former senior Department of Labor (DOL) investigator and CEO of ERISA Smart.
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Xponential Growth Solutions and ERISA Smart have collaborated to create and launch Fiduciary Education.

Fiduciary Education is an online learning and certification hub for retirement plan sponsors and fiduciaries. With the program, students will learn directly from David Donaldson, former senior Department of Labor (DOL) investigator and CEO of ERISA Smart.

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“Fiduciary education must be a priority for plan sponsors. It will help them navigate the complexities of fulfilling fiduciary responsibilities. During my time at the DOL I found that most plan sponsors were not aware of their responsibilities and the personal risk associated with managing their plan. It is what you don’t know that gets you in trouble during a DOL investigation,” says Donaldson. “The course is relevant for any business owner, CFO, or HR professional of any plan size. Students learn about topics covering fiduciary responsibilities, hiring and monitoring service providers, and understanding fees.”

The course is $375 and students can receive SHRM and HRCI credits upon the completion of the course. “There are very few options for plan sponsors to receive fiduciary education and many of these options are expensive for your average plan sponsor. We priced this so even a start-up plan could take advantage of it,” Donaldson tells PLANSPONSOR.

He added that Fiduciary Education is also available for plan sponsors from several advisers, recordkeepers and defined contribution investment only (DCIO) firms. Plan Sponsors who are interested in this can go directly to www.fiduciaryeducation.com or speak with their current adviser about getting access to the course.

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