The Markets February 21, 2008

Dow Jones Introduces Benchmarks for Lifecycle Funds

Dow Jones Indexes has launched the Real Return Target Date Indexes, a series of indexes designed to serve as benchmarks for lifecycle portfolios.
Reported by

Each index in the Dow Jones Real Return Target Date Indexes series represents a mix of sub-indexes representing stocks and bonds, Treasury Inflation Protected Securities (TIPS), as well as commodities and real estate, which potentially counterbalance inflation, according to the company. Industry experts were consulted on the design of the Dow Jones Real Return Target Date Indexes, and an advisory board is being formed for continued oversight.

The Dow Jones Real Return Target Date Indexes comprise 11 indexes, nine with target dates in five-year intervals out to 2045, a Dow Jones Real Return 40+ Index, and a Dow Jones Real Return Today Index, the announcement said. Each index is a composite of sub-indexes that represent stocks, bonds, TIPS, commodities and real estate securities – the Dow Jones Wilshire Global Total Market Index, Lehman Aggregate Bond Index, Lehman U.S. TIPS Index, Dow Jones-AIG Commodity Index, and Dow Jones Wilshire Real Estate Securities Index.

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The component asset classes are weighted within each Dow Jones Real Return Target Date Index to measure a targeted level of risk. Stocks and bonds are classified as nominal assets with high- and low-risk profiles, respectively; real estate securities and commodities are considered real assets with high-risk profiles; and U.S. TIPS are considered real assets with a low-risk profile. Over time weighting of the asset classes are adjusted based on predetermined formulas to adjust the risk level systematically as the index’s target date approaches.

“As more plan sponsors pursue target date strategies in light of the Pension Protection Act, market participants require more choice when selecting their benchmarks. The Dow Jones Real Return Target Date Indexes are differentiated because they include a diversified mix of asset classes as well as measure inflation-adjusted performance, or the “real’ return, of a target date portfolio,” said Michael A. Petronella, president of Dow Jones Indexes, in the company announcement.

More information on the Dow Jones Real Return Target Date Indexes can be found at www.RealReturnIndexes.com.

Data & Research February 20, 2008

Pet Peeves

Times may be tough, but it looks like Fido and Fluffy have nothing to worry about.
Reported by
A national pet owner survey claims that if financial issues caused pet owners to curtail their monthly expenses they are far more likely to cut back on luxury items, electronics, perhaps even groceries and household goods, rather than pull back on care or supplies for their pets.
The online survey of 665 pet owners (including 602 who have a dog or cat) was conducted in late December by Fleishman-Hillard International Communications. The Fleishman-Hillard survey found that most pet owners consider their pets to be members of their family, like a child, sister, or brother.
However, if things get too bad, survey respondents said they might scale back on pet fashions, toys – and trips to pet care professionals like pet walkers, sitters, and groomers. And, as with health care issues generally, the study respondents said they may cut their spending on veterinary visits and preventative medications.
This survey was conducted using a consumer panel provided by Greenfield Online, from December 20-23, 2007. Interviews were completed by 1,048 panel members 18 years of age or older living in private households in the continental United States. Of those interviewed, 665 were pet owners; 383 people were not eligible to participate in the survey because they did not own a pet.

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