Data & Research May 10, 2012

Mothers Are Household CFOs Except When it Comes to Retirement

 

A majority of women act as chief financial officers of their households, making most of the financial decisions or sharing responsibility.

 

 

Reported by

But men are still likelier than women to hold investments, have financial plans and be more financially prepared for retirement, a study by Bank of Montreal’s Retirement Institute found.

According to the BMO Retirement Institute, 82% of Canadian women are either the primary decision maker or share responsibility equally for household financial decisions. Women control about one-third of all wealth in North America at a rate that increases by 8% a year.

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

Despite this financial clout, women are still less confident than men about their finances. BMO Retirement Institute found that:       

·         Men are more likely than women to have investments and a financial plan (62% versus 52%);

·         Men also tend to be more engaged and confident with financial planning, and more open to taking risks; and

·         Because of lower earnings, work histories that may have gaps and longer life spans, among other factors, women tend to be less financially prepared for retirement.

 

 

(Cont’d...)

“It’s great news that women are controlling an increasing amount of wealth in Canada and are key decision-makers for household finances,” said Tina Di Vito, head of BMO Retirement Institute. “However, it’s also clear that women need to become more confident with managing their finances and preparing for life events, such as retirement.”

Women need to be actively engaged in personal financial matters in order to take better charge of their retirement, Di Vito added. She recommends making a financial plan, exploring investment strategies and finding a financial professional to help map out everything.

Di Vito notes women are often looking for clear, honest and relevant communication, so when selecting an adviser, she counsels them to look for transparency and good listening skills, and to seek advice tailored to their unique situation.

Education is key to learning more about investing and retirement, Di Vito says. As women learn more they can establish a financial plan that includes short- and long-term goals toward ensuring a secure retirement, and the steps women can take to reach those goals.

 

More advice and calculators for women, including one on how to assess retirement savings, are available here.

 

The Markets May 10, 2012

U.S. Equity Funds See Net Outflows For Second Month

 

Investors put only $26.5 billion in net inflows into stock and bond mutual funds in the U.S. in April.  

 

 

Reported by

This marked a decline from March, when investors put net $32 billion in flows into long-term funds, according to Strategic Insight (SI), an Asset International company.

In April, domestic equity funds saw net outflows of nearly $6 billion during a month of lackluster demand for U.S. stocks: the benchmark S&P 500 Index generated a total return of -0.6% in April amid trading volumes that were down more than 8% from the trailing 12-month average. That brought total U.S. equity fund flows to -$6 billion for the first four months of 2012—a sharp reversal from the first four months of 2011, when U.S. equity funds enjoyed cumulative net inflows of $41.9 billion.

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

International and global equity funds offered some relief, drawing net inflows of $10.4 billion in April—the best month for such mutual funds since March 2011. In the first four months of 2012, international equity funds drew aggregate net inflows of $26.5 billion.

“Investors remain in a holding pattern, as economic growth rates declined or turned negative in a number of key markets,” said Avi Nachmany, SI’s director of research. “The fragile state of investor confidence will benefit bond fund inflows in the near future as investors stay centered on income strategies.”

 

(Cont...)

Taxable bond funds saw net inflows of $21 billion in April, as investors continued to use bond funds as income-producing alternatives to money market funds, CDs and bank deposit accounts. Highlighting fund shareholders’ low appetite for risk, low-volatility bond funds took by far the largest portion of bond fund flows in April. Taxable government-backed bond funds saw very small net inflows. Taxable bond funds have drawn an estimated $104 billion in the first four months of 2012, far ahead of the $59 billion in net flows that taxable bond funds took in over the course of the same period a year ago.

Meanwhile, muni bond funds saw net inflows of $0.6 billion in April. Muni bond funds drew $17 billion in net inflows through the first four months of the year, as long-term muni bond issuance has risen substantially from year-earlier levels.

Money market funds saw net outflows of $22 billion in April, which was an improvement over March’s net outflows of $69 billion. Ultra-low yields continued to hamper demand for money market funds. 

Separately, SI said U.S. exchange-traded funds (ETFs) saw roughly $3 billion in net inflows in April 2012. That brought total ETF net inflows to $58 billion for the first four months of 2012—a pace that could result in the sixth straight year of $100 billion or more in annual net inflows to ETFs.

Bond ETFs were the only major category to post net inflows in April, drawing net $5 billion. Equity ETFs saw an estimated $2.5 billion in net outflows, with both domestic and international equity products seeing net redemptions.

At the end of April 2012, ETF assets (including exchange-traded notes) stood at $1.204 trillion, up from $1.06 trillion at the end of December.

 

«