Products October 13, 2011

Lincoln Financial Introducing LVIP Protected Profile Funds

Lincoln Financial Group is rolling out the LVIP Protected Profile Funds, a target-date fund-of-funds investment option available through its micro-to-small market retirement plan solution.
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The Protected Profile Funds offers investors access to both capital protection and volatility management within a target-date fund. Advantages include a simplified process to help investors achieve a diversified portfolio and exposure to a wide variety of asset classes, regions, and investments styles.

The new funds are made up of a mix of asset classes, managed by multiple managers, designed to accommodate changing market conditions and help investors meet their investment objectives throughout retirement, according to the company.

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The Protected Profile Funds seek to reduce volatility risk by targeting a specific level of variability of returns based on each fund’s respective target date.  While the results are not guaranteed, the fund seeks to manage this and other risks by employing a protection strategy designed to respond to changing market conditions and periodically rebalance and adjust their overall asset allocation to reflect the level of risk in the market. 

The investment lineup with the Lincoln micro-to-small market retirement program offers a range of investment options, providing plan participants with an opportunity to choose from over 90 investment options from 17 fund families. The program also offers a range of distribution options, including Lincoln’s patented i4LIFE Advantage solution.

Data & Research October 13, 2011

Nearly Half of Investors Worry About Market Volatility

A survey released by Natixis Global Asset Management found nearly half of American investors fear losing money due to market volatility.
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The Natixis U.S. Investor Insights Survey found that almost 47% of investors worry about losing money due to market volatility, potentially limiting what they invest in the market. Yet a significant portion of investors – about four in 10 – are not interested in alternative products and strategies that could potentially diversify portfolio returns.  

The survey also found 80% of investors believe the financial crisis is continuing to change the investment landscape, and 66% say they have changed their expectations about future investment returns.

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While investors recognize the importance of understanding risk and diversification, few understand alternative investments, which can help stabilize a portfolio and diversify returns throughout periods of market turbulence, Natixis said.

Half (49%) of U.S. investors said they understood their portfolio’s risk “moderately” or “very well,” compared to a small percentage of investors (4%) who said they don’t understand it in detail.

Seven in 10 said they understood alternative investments “only a little” or “not well at all,” and only one in 25 said they understood them “very well.” More than half (53%) say they don’t understand how they work, and more than 40% even admit to having no idea of what alternatives are.

Even among high-net-worth investors, who compose the bulk of those eligible to invest in many alternative products, just 7% say they understand alternatives “very well,” and one in three (36.5%) say they don’t understand these instruments.

According to the Natixis survey, a majority of investors (63%) say they will invest only in products with which they are familiar, and two-thirds (69%) say they need to learn more about alternatives before investing in them. Nearly half (44.9%) said the greatest barrier to considering them for their portfolio is a lack of “enough information about them.” A significant number of investors are simply not willing to make any allocation to alternative investments, including more than a quarter of emerging high-net-worth investors (with $500,000 – $1 million in investable assets) and nearly a quarter (24%) of high-net-worth investors.

The Natixis Global Asset Management U.S. Investor Insights Survey was conducted by CoreData Research and surveyed 463 American adults. Two surveys were conducted, in May and July 2011.

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