Products August 29, 2007

MassMutual to Add Fiduciary Warranty to DC Offering

MassMutual's Retirement Services Division will introduce a Fiduciary Warranty, available in the fourth quarter of 2007, to qualifying plans that include investment options available through MassMutual's Smart Architecture Investment Program.
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The warranty can help protect plan fiduciaries if there is a legal judgment that results in damages attributable to a breach in the warranty, the firm said, in a press release. Assurances provided by the warranty include:

  • independent certification that Employee Retirement Income Security Act (ERISA) standards of fiduciary prudence have been applied to investment identification, screening and monitoring,
  • independent certification that investment options under MassMutual’s Smart Architecture Investment Program provide a suitable basis for plan participants to construct well-diversified investment portfolios for retirement, and
  • investment options made available include balanced and target date investments that meet the Department of Labor’s proposed requirements for Qualified Default Investment Alternatives (QDIA).

Underpinning MassMutual’s Fiduciary Warranty will be a separate, independent third-party certification program that will also launch early in the fourth quarter, the announcement said.

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The certification will be conducted annually and will focus on MassMutual’s investment identification, screening and monitoring process, which uses quantitative and qualitative factors. Evaluation criteria will include investment performance, style consistency, manager tenure, investment philosophy, and expenses.

Additional information about MassMutual’s third-party certification program and terms and conditions of the Fiduciary Warranty will be released in the fall. MassMutual’s Web site is www.massmutual.com.

The Markets August 29, 2007

Mutual Funds See Positive Inflows in July

A month after suffering a $2.7-billion outflow, mutual funds ducked back into solid positive territory in July with $26.7 billion in inflows, according to data from the Financial Research Corporation (FRC).
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A FRC news release said International/Global funds led the charge in July with net inflows of $19.2 billion, followed by Corporate funds with a $3.5 billion net advance. Domestic equity funds had $3.13 billion in July inflows.

June’s asset drop followed a $5.3-billion advance in May, according to the data.

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By Morningstar category, Intermediate-Term Bond Funds led the way in July with $5.37 billion in inflows, followed by Foreign Large Blend with $3.83 billion in inflows, World Stock with $2.81 billion, Large Blend with $2.46 billion, and Foreign Large Value with $2.1 billion.

American Funds topped all complexes with $5.6 billion of July net inflows, followed by State Street Global Advisors at $5 billion and the Vanguard Group at $4 billion.

Fidelity’s Nasdaq 100 Index collected $4.9 billion to lead the July fund sales charts, followed by State Street Global Advisers’ SPDR Trust at $2.45 billion, and American Capital Income Builder at $1.52 billion.

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