Happy Friday readers! This weekend’s mailing focuses on the always timely topic of Investing, with a particular focus on risk and cost management. As we report below, the growth in target-date fund usage continues to be incredible; missing is a deeper discussion of sequence of returns risk and other potential challenges for participants associated with this growth. At the same time, new research points to a number of drivers behind the acceleration in asset management fee compression, tied to improved automation and stronger competition. We hope you will share some of what you read with a client or colleague.
The growth in target-date fund usage continues to be incredible; missing is a deeper discussion of sequence of returns risk and other potential challenges for participants associated with this growth.
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Investors in TDFs need to look beyond price tags to investment strategy to determine the appropriateness of the fees and should be mindful of the relatively tight dispersion of returns within TDF categories, Morningstar warns.
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New research from Cerulli points to a number of drivers behind the acceleration in asset management fee compression, tied to improved automation and stronger competition; the research and analytics firm also analyzes the competitive landscape of “robo-advice.”
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Variable annuities continue to face challenges in the wake of transaction processing disruptions caused by the now-vacated DOL fiduciary rule; however, experts anticipate sales to recover as business processes normalize and newer product types come to market.
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Higher education clients with very large 403(b) plans could theoretically benefit from new laws or regulations allowing them to invest participant assets through collective trust vehicles, but for most other non-profit clients, CITs might not make that much sense.
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