In an article, the company offers sample governance and investment procedures designed to help plan sponsors get back on track toward achieving plan objectives.
According to Portfolio Evaluations, Inc. (PEI), recent market research suggests that sponsors of mid-sized defined benefit (DB) plans (those with assets of between $50 and $500 million) remain most concerned with risk management, lower future return expectations and stock market volatility. However, what the company finds more concerning is these same surveys also indicate that many DB plan sponsors have yet to formally develop a goal for their retirement programs, nor have they designed a road map for getting there.
Richard Torbinski, partner/co-founder, Marcia Peters, CFA, chief investment officer, and Edward Landsman, senior consultant, have written an article, “Mid-Sized Pension Plans: How to Get Back on Track in 2017.” The article provides a checklist for plan sponsors to use.
In their article, the authors note that one commonly found, yet unintended, roadblock to achieving a plan’s goals is lack of proper plan oversight. In many cases an organization’s chief financial officer (CFO) has taken on sole responsibility for this, and may meet independently with plan service providers to review portfolio logistics and develop a schedule of next steps. However, the authors say, “without a properly designed road map, each of these providers ends up working autonomously, deprived of the benefits of having an interrelated and cohesive strategy.”
The authors say, in addition, often the roles of the actuary, investment adviser and asset managers are misunderstood by plan sponsors. There are also times when the fiduciary oversight process has been loosened or abandoned after a plan has been frozen.
The article offers sample governance and investment procedures designed to help mid-sized DB plan sponsors get back on track toward achieving plan objectives.
The Nationwide
International Small Cap Fund will invest at least 80% of its net assets in
equity securities of international companies with smaller market capitalizations
at the time of purchase, the firm announced. Nationwide says the fund’s
portfolio will be diversified across countries, industries, issuers and styles
while aiming for long-term capital growth. It will be subadvised by Wellington
Management Company.
The fund will
reflect a management structure consisting of multiple sub-portfolios, each one
being managed within individual sectors of expertise by one of Wellington’s 24
global industry analysts. Mark Mandel, CFA, and Cheryl Duckworth, CFA, are
responsible for risk oversight and ensuring sector neutrality.
“While many
investors maintain international allocations within their portfolios, they are
often heavily weighted toward larger, more well-known companies, which may
limit a portfolio’s growth potential,” says Mike Spangler, president of
Nationwide Funds. “The Nationwide International Small Cap Fund enables
investors to further diversify their investment portfolio and expand their
potential for capital appreciation.”
Wellington is an
independent investment company with nearly $1 trillion in assets under
management serving clients in more than 50 countries.
“We selected
Wellington based on their consistent track record of providing above benchmark
returns regardless of market conditions, says Spangler. “This appointment
serves as another example of our commitment to make institutional-caliber asset
managers available to our individual investors.”
Investors
interested in learning more about Nationwide’s mutual funds should contact
their financial professional or click here. Financial
professionals interested in learning more should call the Nationwide Funds
Group sales desk at 877-877-5083, option 3, or visit the website.
NEXT: First
Eagle to Add Retirement Shares to Mutual Funds
First Eagle to Add
Retirement Shares to Mutual Funds
First Eagle Investment Management plans to offer a suite of
retirement share classes for its mutual funds. The firm intends to roll out its
offering in March 2017 with a transparent menu of pricing options for plan
fiduciaries.
“As an investment manager, First Eagle pursues goals that
are critically important to retirement savers—preservation of purchasing power,
downside protection and attractive long-term returns,” says Robert Bruno, head
of retail distribution at First Eagle and president of FEF Distributors. “Our
record in these areas has already earned us the trust of a number of retirement
plans, and the new share classes should make it easier for plans to access our
investments through vehicles that are transparent and dedicated to this
market.”
To pursue this initiative, the firm hired Joseph Lee as head
of retirement platforms and strategy in December 2016. Lee will be tasked with building
relationships with retirement plan recordkeepers and intermediaries, while developing
the firm’s strategy for delivering solutions to group retirement plans and
individual retirement savers. Prior to joining First Eagle, Lee was at
DoubleLine Capital as relationship manager in charge of national accounts for
the defined contribution investment-only (DCIO) business.
“I am very pleased that we have attracted such an
experienced and talented executive to First Eagle,” says Michael Rosenberg,
head of Retirement Investment Solutions. “His arrival at the firm and the
addition of the four new share classes enhance our ability to help Americans
saving for retirement.”
He added, “A shortfall in retirement savings continues to
present significant challenges to many Americans. To make a positive difference
in retirees’ lives, we think investments should combine attractive real returns
over full market cycles with the ability to help prevent permanent impairment
of capital in down periods—especially in the years just before and shortly
after retirement. Our investment strategies seek to embody this combination.”
Launched in 2016, First Eagle’s Retirement Investment
Solutions group will closely partner with financial advisers, investment
consultants and retirement plan recordkeepers to provide investment solutions
to plan sponsors, plan participants and individual retirement savers.
NEXT: BCM Expands Smart Beta Solutions
BCM Expands Smart
Beta Solutions
Beaumont Capital Management has rolled out a new smart beta
fixed income solution, the BCM Global Fixed Income strategy. This adds to the
firm’s fixed income suite, which includes three defensive fixed income offerings
meant to protect against the challenges posed by today’s high-interest rate
environment.
“As we’ve experienced in recent months, the bond market is
far from immune to periods of volatility and the risk of significant asset
loss,” explains Dave Haviland, BCM’s managing partner. “More than ever,
investors need the same benefits of tactical management in their fixed income
portfolio as they do for their equity investments. BCM Dynamic Global Fixed
Income and the suite of BCM fixed income strategies aims to provide that level
of protection as we face greater uncertainty in the bond markets.”
The Dynamic Global Fixed Income process seeks risk-adjusted
returns and downside protection through rules-based analysis, primarily
focusing on volatility. The strategy uses a set of quantitative models seeking
to identify patterns in the volatility of domestic and international fixed
income markets as a whole to either take advantage of opportunities or avoid
negative volatility by reallocating to defensive positioning. The strategy’s
inception date is October 1, 2013.
“In this type of prolonged bull market, investors commonly
start shifting a portion of profits taken in equities to fixed income in their
portfolios. However, investors may forget that with rises in interest rates and
the potential for continued hikes, passive fixed income is at risk of drawdowns
as well,” explains Eric Biegeleisen, BCM’s director of Quantitative Research
and portfolio manager of the strategy. “Compounding this with the U.S. dollar’s
strength, investors need a more dynamic approach to fixed income as a way to
invest in a lower-than-equity risk portfolio.”
The new strategy joins the BCM Paradigm Tactical Fixed
Income and the BCM Income portfolios in the firm’s fixed income suite.
NEXT: SunAmerica Funds Rebrands to AIG Funds
SunAmerica Funds
Rebrands to AIG Funds
American International Group (AIG) announced the rebranding
of its retail mutual fund family to AIG Funds from SunAmerica Mutual Funds,
effective February 28, 2017.
Under this new brand, AIG will provide financial
professionals and consumers with diversified investment and income products.
“We are committed to creating a leaner, more profitable and
focused insurer,” says Kevin Hogan, CEO of AIG’s Consumer Insurance. “By
aligning the SunAmerica brand more closely with AIG, we are able to leverage
the strength and scale to build greater awareness and visibility among our core
audience of financial professionals and consumers.”
The name and logo under which the retail mutual funds are
marketed is being transitioned to the AIG brand. Each fund series will retain
“SunAmerica” in its name. SunAmerica Asset Management will remain the retail
mutual fund’s adviser. The fund’s investment strategies, portfolio managers,
ticker symbols and CUSIPs in connection with the transition will remain
constant as well. In addition to the product rebranding, a new website will be
available on February 28, 2017, at www.aig.com/funds.
During this process, the SunAmerica Focused Alpha Growth
Fund will be renamed the AIG Focused Multi-Cap Growth Fund. The 2020 High
Watermark Fund will not change its name.
NEXT: Ivy Turns to International Exposure in Small Cap
Market
Ivy Turns to International
Exposure in Small Cap Market
Ivy Investment Management Company has rolled out its Ivy IG
International Small Cap Fund, which focuses on smaller-capitalization companies
below $10 billion outside North America that exhibit perceived growth at a
reasonable price, the firm announced. It will be subadvised by IG International
Management.
“One of our strengths is the ability to complement our
investment team with outside partners that bring knowledge and skill in unique
categories,” says Thomas W. Butch, president and CEO of Ivy Distributors. “IG
International is an example of that, as we broaden the Ivy lineup with a focus
on an asset class that has not been as widely available in the U.S., giving
investors the opportunity to increase international exposure and diversify
portfolios.”
The fund is managed by Martin Fahey, CFA; and Bryan Mattei,
CFA. Together, they select fund holdings through a proprietary stock selection
process, while incorporating a top-down view for thematic drivers.
“Interest in international small caps has been driven by a
combination of outperformance, attractive valuations and innovation among
smaller companies,” explains Fahey. “We believe successful small cap investing
requires the identification of under-valued, under-appreciated companies with
growth potential, taking into account competitive advantages.”
NEXT: Conning Unveils LDI Pooled Fund Suite
Conning Unveils LDI
Pooled Fund Suite
Conning, a global investment manager serving institutional
investors, has launched a pooled fund suite focusing solely on liability-driven
investment (LDI) solutions for U.S. corporate pension plans.
In addition, the firm has appointed Erin Spalsbury as head
of LDI portfolio management to oversee all LDI mandates including separately
managed accounts and the new pooled fund option.
“Conning is deeply committed to helping pensions solve their
funding challenges, leveraging our extensive LDI investment experience and our
expanding global investment platform,” says Woody Bradford, chairman and CEO of
Conning. “It is the next logical step in our strategic efforts to grow the
Conning business to serve institutional investors’ evolving needs.”
The suite is structured as a collective-investment trust
(CIT) offering pension plans a variety of investment options based on where
they stand in de-risking glidepaths. The funds range from standard
long-duration to maturity-bucketed credit sleeves which can be used separately
or combined to form a customized LDI strategy. These funds also offer interest
rate exposure through derivatives on a levered basis.
“As U.S. defined benefit corporate pension plans continue
their de-risking journey, we believe that customizing an LDI strategy becomes
even more important for them,” explains Owais Rana, managing director and head
of Investment Solutions at Conning. “Our experienced LDI team utilizes a
specialized approach to help clients navigate through their glidepath journey
and develop LDI strategies at each step of the de-risking framework.”
NEXT:Davis Advisors Launches Active ETFs
Davis Advisors Launches Active ETFs
Davis Advisors has launched three new actively-managed
exchange-traded funds (ETFs). The Davis Select U.S. Equity ETF (DUSA), Davis
Select Financial ETF (DFNL), and Davis Select Worldwide ETF (DWLD) are the
first actively managed ETFs released by the firm.
Taking a bottom-up approach, each ETF utilizes the Davis
Investment Discipline as a benchmark-agnostic portfolio. The ETFs have low
expected portfolio turnover and a strategic long-term time investment horizon,
the firm says.
“We’re pleased to offer investment solutions that previously
have not been widely available: actively managed equities in a traditional
ETF,” says Chris Davis, portfolio manager and chairman. “Davis ETFs offer a
differentiated combination of active stock selection and our proven time-tested
investment discipline with the traditional benefits of an ETF.”
DUSA
is a portfolio of U.S., large-cap businesses, managed by Davis and his partner
Danton Goei. It has about 20 holdings and an expense ratio of 0.60%. DUSA
aims to provide investors with exposure to best-of-breed, U.S. large-cap
companies.
DWLD is a
portfolio of best-of-breed businesses in the U.S. and abroad managed by Goei
and Davis. It has about 40 holdings and an expense ratio of 0.65%. DFNL is a portfolio of best-of-breed financial companies
managed by Davis. It has about 20 holdings and an expense ratio of 0.65%.
“The financial sector is one of the most attractive areas in
today’s market; however, it is vast and inefficient, so we believe selectivity
and experienced active management are key to outperformance,” says Davis.