Products January 30, 2007

Nationwide Launches Newsletter for Plan Administrators

To help plan administrators keep up with the many legislative provisions impacting their clients in 2007, Nationwide has launched a free, periodic newsletter that will offer ongoing education about legislative, regulatory and administrative changes.
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Covering everything from proposed default investment rules to participant statement requirements, Nationwide said each edition of the newsletter will give administrators timely, easy-to-understand explanations of the various provisions and useful tips on implementing necessary changes to ensure plans are in compliance.

The newsletter, titled Legislation Made Real, was developed in partnership with McKay Hochman Co., Inc., a division of Newkirk Products Inc.

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“This new resource is designed to keep administrators up-to-date with the regulatory landscape and arm them with information they need to successfully manage their retirement plans,’ said Karen Eisenbach, vice president of retirement plans marketing for Nationwide Financial, in a press release.

The Markets January 29, 2007

Best Performing Funds Fail to Repeat Performance

Advisers who use performance as the sole, or significant, driver in investment selection might want to rethink their strategy because the latest study of fund performance over time from Standard&Poor’s found that very few funds top performing funds managed to consistently repeat top-half or top-quartile performance in 2006.
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Specifically, over five years ending December 31, 2006, only 71 (13.2%) large-cap, 16 (9.9%) mid-cap and 24 (10%) small-cap funds hung onto their top-half ranking over five consecutive 12-month periods. A total of eight (3%) large-cap, two (2.5%) mid-cap and zero small-cap funds maintained a top-quartile ranking over the same period.

“Standard & Poor’s research suggests that screening for top-quartile funds, as the sole basis for an investment decision, is inappropriate,” said Srikant Dash, Index Strategist at Standard & Poor’s, in the news release. “Very few funds repeat a top-quartile performance. Furthermore, Standard & Poor’s research shows that a healthy percentage, and in most cases a majority, of top-quartile funds in the future will most likely come from the ranks of prior period second and third quartiles.”

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Looking at longer term performance, only 17.3% of large-cap offerings with a top-quartile ranking over five years ending December 31, 2001 maintained that ranking over the next five years ending December 31, 2006. Only 10.4% of mid-cap and 17.7% of small-cap funds kept a top-quartile performance over the same period.

Meanwhile, 37% of large-cap, 31.6% of mid-cap and 47.5% of small-cap funds with a top ranking over five years ending December 31, 2001 maintained a top ranking over the next five years ending December 31, 2006.

“The characteristics of top performing funds are similar,” said Rosanne Pane, Mutual Fund Strategist at Standard & Poor’s, in the news release. “On average top funds tend to have more experienced management and lower expenses relative to their peers. They also focus on minimizing losses during down markets.”

More information is at www.standardandpoors.com.

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