Products May 22, 2014

John Hancock Expands Asset Allocation Models

John Hancock Retirement Plan Services added five new asset-allocation options to the JH Signature 401(k) Plan Platform.
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New offerings include target date fund (TDF) suites from T. Rowe Price and American Century, as well as additional target date and lifestyle portfolios from John Hancock.

Nearly 80% of participants served on the platform use an asset-allocation option, says Andrew Ross, senior vice president of market and product development for John Hancock Retirement Plan Services. He says the JH Select platform offers advisers and plan sponsors a way to construct investment lineups that meet the specific needs of their plans.

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“Given the importance of asset-allocation portfolios, we are pleased that plan sponsors now have nine different asset-allocation offerings from which to choose,” he adds.

The new options are as follows:

  • T. Rowe Price Retirement Funds – The fund series includes actively managed TDFs that maintain significant equity allocations based on proprietary allocation modeling and research. The asset allocations continue to shift for 30 years after the target retirement date and the underlying portfolios consist mainly of actively managed T. Rowe Price funds.
  • American Century One Choice Target Date Portfolios – These funds provide broad asset class coverage and diversification through established strategies managed internally. The portfolios seek to mitigate volatility in retirement when market risk is most critical, and the underlying asset mix shifts as retirement nears.
  • JH Retirement through Managed Portfolios 2010-2055 – This actively managed set of portfolios invests in passive underlying funds. Portfolios are designed to help support participants’ need for income through their retirement years.
  • JH Lifestyle-Managed Portfolios – These portfolios offer participants broad diversification in a single actively managed fund, with passive, low-cost underlying investments.
  • JH Lifestyle-Managed Volatility – The suite of five funds is designed with the objective of limiting losses and maintaining volatility within a target range during periods of high volatility.

The new options join the four existing asset allocation options already offered on the JH Signature platform, including existing “to” and “through” retirement target-date options, JH Lifestyle actively managed portfolios and the Guaranteed Income for Life Select portfolios.

All of the newly added asset allocation portfolios will qualify under the JH Fiduciary Standards Warranty program and are available to new and existing JH Signature plans effective immediately. More information is available at the John Hancock Retirement Plan Services website, here.

Data & Research May 22, 2014

Advisers Focused on Asset Allocation

Market volatility and questions about interest rates have brought asset allocation and portfolio management to the forefront for financial advisers, according to a Fidelity Investments survey.
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Adviser concerns about market volatility and limiting downside risk peaked during January 2014, a period of time in which the S&P 500 Index experienced its worst monthly decline since May 2012, according to the Fidelity Advisor Investment Pulse survey.

Today about 20% of financial advisers say they are strongly concerned about volatility, Fidelity says. This is down from about 32% at the start of the year, but up from about 15% in the third quarter of 2013, when U.S. equity markets were performing strongly.

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Asked to list their most pressing concerns, financial advisers most often shared the following:

  • Portfolio management and investment allocation;
  • Bonds and fixed-income investments;
  • Market volatility and avoiding potential meltdowns;
  • Interest rate risk; and
  • Finding yield and generating income.

Many financial advisers spent the first quarter of 2014 thinking about what to do with client portfolios if interest rates rise, explains Scott E. Couto, president of Fidelity Financial Advisor Solutions, which provides mutual funds and other investment products to advisers. Interestingly, advisers and their clients have been less focused on what many consider to be the flip side of rising rates, inflation, he says.

More on the survey results is available here.

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