American Beacon Adds High Yield Opportunities Fund

American Beacon Advisors announced the addition of American Beacon SiM High Yield Opportunities Fund (Ticker: SHOIX) to its family of mutual funds.

The fund seeks to achieve high current income and capital appreciation. Its sub-adviser, Strategic Income Management LLC (SiM), takes a long-term approach to the high yield markets and employs a philosophy centered on identifying secular trends and themes. Gary Pokrzywinski, Chief Investment Officer, and Brian Placzek, Head of High Yield Research, have primary responsibility for the fund’s day-to-day management and financial analysis.  

According to the company, the fund seeks to maximize current income by investing in a diversified portfolio of fixed income securities that are generally rated below investment grade. SiM uses a core top-down philosophy to identify sectors, industries and companies that will benefit from positive long-term trends. It also identifies those that are undergoing a change in dynamics that can be capitalized on due to market volatility. Once potential investment opportunities are identified, SiM uses bottom-up research to assess the fundamental strengths and weaknesses of individual securities.    

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Under normal circumstances, at least 80% of the fund’s net assets will be invested in non-investment grade securities. The fund may invest up to 35% of its net assets in securities of foreign issuers, including up to 25% in emerging markets securities. 

Small Businesses Wary of Offering Retirement Plans

One-third of companies with fewer than 25 employees offer retirement plans, compared to about 80% of companies with 100 or more employees, a report found.  

The report, “Small Business and Employee Retirement Savings Plans,” was a joint project of the National Center for Policy Analysis (NCPA) and PostPartisan Foundation for The Campaign for Economic Security. They found that small-business owners are concerned about the administrative costs of a 401(k)-type retirement plan, not being able to afford a company match, or lack of interest from employees. The economy and changes in retirement plan options were cited as the main causes. 

Report author and NCPA Senior Policy Analyst Pamela Villarreal contends specific public policy changes would make it easier for small businesses to offer retirement plans. One policy idea is to allow them to auto-enroll their workers into traditional IRA accounts, making it more likely that employees will stay enrolled in the system.  

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“An auto-enrollment option for IRA plans would be an enormous asset because employers would have no fiduciary liability, and would not have to make matching contributions, making the plans simple and more cost-effective for small businesses,” said Villarreal.  “Businesses currently receive a tax credit for the first three years they provide a retirement plan.  Lawmakers should consider making this tax credit permanent or allowing a choice between the current flat credit and a ‘per participant’ credit.” 

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