The Markets October 2, 2007

Zacks Launches Securities-Based Lifecycle Indexes

Zacks Investment Research, Inc. has launched a lifecycle index series, which includes four target retirement dates.
Reported by

A securities-based lifecycle program reduces plan sponsor exposure to lawsuits because it complies with the new Pension Protection Act regulations at the highest levels, according to Zacks.

The company says the lifecycle funds have no conflicts-of-interest or fee layering from sub-sector exchange-traded funds or proprietary mutual funds.

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The series includes the following indexes:

  • Zacks 2040 Lifecycle Index
  • Zacks 2030 Lifecycle Index
  • Zacks 2020 Lifecycle Index
  • Zacks 2010 Lifecycle Index
  • Zacks At Target Lifecycle Index

“The industry average allocation to equities in 2010 funds is 52%. That may be the right answer for a Monte Carlo simulation but the wrong one for investors with three years to go before they fund a retirement annuity, a vacation home, education, a wedding, or long-term medical care,” said Michael Case Smith of Zacks Index and Allocation Group, in a press release. “As target dates near, people care more about return of capital than return on capital, regardless of what computer models say.”

The indexes are being used in a partnership between Amerivest Investment Management, LLC and XShares Advisors LLC for their exchange-traded fund lifecycle portfolios: TDAX Funds, Inc. (See Amerivest, XShares Launch Lifecycle ETFs).

Products October 2, 2007

AIG Introduces New No-Load Mutual Fund Program to 403(b) Plans

AIG VALIC is launching a no-load mutual fund retirement savings program for the K-12 403(b) market, which includes index, lifecycle, and actively managed funds.
Reported by

The Profile Retirement Program offers more than 30 no-load mutual funds covering all major equity and fixed-income asset classes. The offering also includes telephone enrollment and Web-based account management tools, along with support services and investment advice available from AIG VALIC’s Client Care Center and Retirement Education Center.

The active funds are managed by firms that include American Century, T. Rowe Price, Oppenheimer, BlackRock, and Wellington Management. Expense ratios for the funds range from .35% to 1.17%, and average 0.8%, according to a press release.

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AIG VALIC also acts as custodian for the funds, providing compliance infrastructure and support to plan sponsors, along with written assurances in the form of “hold harmless agreements” and other service provider agreements to assist the plan in meeting strengthened regulatory requirements.

More information is at http://www.aigvalic.com/valic2003/plansponsor.nsf/contents/home.

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