Break from the Grind September 18, 2017

TRIVIAL PURSUITS: What Were the First Milkshakes Made From?

The term “milkshake” was first used in print in the year 1885.
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However, at that time a milkshake was not what we enjoy as one today.

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What were the first milkshakes made from?

Milkshakes were an alcoholic whiskey drink that was described as a “…sturdy, healthful eggnog type of drink, with eggs, whiskey, etc., served as a tonic as well as a treat.”

By 1900, the term milkshake referred to “wholesome drinks made with chocolate, strawberry, or vanilla syrups.”

The milkshake made it into the mainstream when in 1922 a Walgreens employee in Chicago, Ivar “Pop” Coulson, took an old-fashioned malted milk (milk, chocolate, and malt) and added two scoops of ice cream, creating a drink which became popular, soon becoming a high-demand drink for young adults around the country.

By the 1930s, milkshakes were a popular drink at malt shops.

The automation of milkshakes developed in the 1930s, after the invention of freon-cooled refrigerators provided a safe, reliable way of automatically making and dispensing ice cream. In addition, the invention of the blender changed the consistency of the drink into what we know today.
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Investing September 18, 2017

White Labeled Funds Attract More Plan Sponsors

Willis Towers Watson makes the case for white label funds in a new paper.

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In the past two decades, investment lineups for defined contribution (DC) plans have remained largely unchanged, according to Willis Towers Watson (WTW).

The firm believes plan sponsors can gain from revamping their lineups with a focus on “reframing the design of actively managed options with an emphasis on fewer, broader investment options to ease participant decision making.”

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The firm explores this concept in a new paper where it makes the case for multi-manager white label funds. WTW reports that these custom options can combine several active risk managers with complementary styles as well as lower-cost passive and smart beta strategies. As a result, these funds aim to provide participants with broad exposure to multiple asset classes as well as “skilled managers potentially at a total net cost below that of many stand-alone active fund options.” Thus, these finds may be able to secure similar returns at lower risk, or higher returns at similar risk.  

WTW also points to the advantage of greater freedom to make changes to the underlining fund managers. Plan sponsors typically rely on safe harbor provisions in making fund changes which require them to deliver notices to all participants within 30 days of replacing a stand-alone fund. As for white label funds, plan sponsors can replace an existing fund with a replacement option on short notice or allocate among the rest of the underlining funds. WTW says the 30-day fund change communication is usually not required because the white label structure and the participants’ individual investment choices would remain intact. For large plan sponsors, white label funds can be especially attractive because they can allow them to leverage “the scale of the plan to access cost-effective investment vehicles with the potential to reduce total plan costs.” The firm also notes its seeing a migration from stand-alone funds to more institutional collective investment trusts.

Of course, there are specific concerns for plan sponsors regarding white label funds that will have to be considered. 

When building multimanager white label options, WTW recommends focusing on multiple levels of risk including volatility, drawdowns and liquidity risks; focusing on investment ideas where the plan can capture returns from a competitive advantage; and only use active management where the net of fee proposition is compelling.

WTW’s full study can be found at WillisTowersWatson.com.

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