Products March 28, 2011

Vanguard to Launch Emerging Markets Stock Fund

Vanguard filed a registration statement with the Securities and Exchange Commission (SEC) for an actively managed emerging markets equity fund.
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The fund will be managed by four advisers, each of which will initially oversee 25% of the fund’s assets.  

According to the announcement, the advisers are:  

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  • M&G Investment Management Limited. Portfolio managers Matthew Vaight and Michael Godfrey will use a valuation-based, return on capital-focused approach to create a portfolio with no country or sector constraints. 
  • Oaktree Capital Management, L.P. The portfolio managers, Tim Jensen and Frank Carroll, will employ a bottom-up research process to invest in a diversified portfolio, limiting exposures by country and industry to avoid concentrated bets. 
  • Pzena Investment Management, LLC. The firm will follow a deep value strategy to invest in stocks based on the research of the three portfolio managers, John Goetz, Caroline Cai, and Allison Fisch, supported by a team of analysts. 
  • Wellington Management Company, LLP. Portfolio manager Cheryl Duckworth, along with the experience of Wellington’s team of global industry analysts, will seek to add value through in-depth fundamental research. 

The Vanguard Emerging Markets Select Stock Fund is expected to have an expense ratio of 0.95% ($9.50 for every $1,000 invested) which is 40% less than the 1.68% expense ratio of the average actively managed emerging markets fund, the announcement said.

Data & Research March 28, 2011

Employees Fearful of Retirement Situation

In the 9th Annual MetLife Study of Employee Benefits Trends, over 60% of Baby Boomers indicate they are behind in saving for retirement.
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Only one in five younger Boomers (ages 46 to 54) and one in four older Boomers (ages 55 to 65) say they have achieved, or are on track to achieve, their retirement savings goals, the MetLife study found.  

In addition, over half of employees, including those on the cusp of retiring, do not know how much annual income their savings will generate once they retire nor are they doing the calculations to find out. Many fear the news will not be positive – four out of ten Boomers don’t think they will have the money they will need. Three in ten Boomers say they don’t know how to determine the figure needed.   

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Nearly three-quarters of employees across all generations (73%) are interested in receiving help from their employers in the form of retirement and financial planning advice.  

The MetLife study also found that approximately half of employees who are behind in saving for retirement are interested in their employer automatically enrolling them in a savings program such as a 401(k). Employees have expressed interest in receiving some, or all, of their retirement income in the form of guaranteed income – 69% would like their employer to offer an annuity as part of their 401(k) plan. However, only 15% of employers said they currently offer annuities.   

The 9th Annual MetLife Study of Employee Benefits Trends was conducted during the fourth quarter of 2010 and consisted of two distinct studies fielded by GfK Custom Research North America. The employer survey comprised 1,508 interviews with benefits decision-makers at companies with staff sizes of at least two employees. The employee sample comprised 1,412 interviews with full-time employees age 21 and over, at companies with a minimum of two employees.   

The 9th Annual MetLife Study of Employee Benefits Trends is available here.

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