Displaying items by tag: retirement

According to a report released this month by the Investment Company Institute, only 2.5% of defined contribution plan participants stopped contributing to their plans last year. This suggests that despite market volatility, Americans are still exhibiting disciplined savings habits. The report, titled “Defined Contribution Plan Participants’ Activities, 2022,” examined participant-directed changes in DC plans by tracking activity through recordkeeper surveys and comparing it to data going back to 2008. Based on the results, DC plan participants remained committed to making contributions like they had in previous years. For instance, only 2.2% of participants stopped contributing in 2021, 2.3% in 2020, 2.3% in 2019, and 3.4% in 2009. In fact, the withdrawal activity of defined contribution plan participants was 4.1% in 2022, the same as in 2021. In prior years, the percentage of plan participants who took withdrawals was 3.8% in 2020, 3.9% in 2019, and 3.1% in 2009. While levels of hardship withdrawal activity increased slightly last year, they were still low in absolute terms. This indicated that despite a challenging market environment, Americans are set on protecting their retirement savings, which was the conclusion of the ICI report.

Finsum:According to the results of a recent ICI report, only 2.5% of defined contribution plan participants stopped contributing to their plans last year despite a challenging market environment.

Published in Wealth Management

According to a report by Nationwide, women investors are getting more uneasy about their retirement prospects as market volatility continues and inflation remains a concern. Nationwide’s eighth annual “Advisor Authority” study, which is sponsored by its Nationwide Retirement Institute, found that more than 40% of women believe the U.S. is in a financial crisis, with another 24% believing that one is looming. Women are also feeling discouraged about retirement preparedness as the report found that nearly nine in 10 women (87%) said that no matter what they do to manage their finances, they still feel blindsided by events outside their control. That marks a double-digit percentage point increase over last year as only 76% voiced that sentiment in 2022. Nationwide also noted that more than half of non-retired women investors (54%) believe that inflation poses the most immediate challenge to their retirement. Thirty-eight percent also cited economic recession as a disruptor, while 21% pointed to market volatility. The “Advisor Authority” research was conducted online within the U.S. by the Harris Poll on behalf of Nationwide in January. The survey included 511 advisors and financial professionals and 789 investors aged 18 or over with investable assets of more than $10,000.

Finsum:According to Nationwide’s eighth annual “Advisor Authority” study, women investors are more uneasy about their retirement portfolios as market volatility, inflation, and a potential economic recession remain a concern.

Published in Wealth Management

Technology-driven real estate investment manager Cadre recently announced the launch of an individual retirement account (IRA) solution, allowing investors to allocate their IRA funds into commercial real estate (CRE) through the Cadre platform. The firm expects the new investment option to continue to expand access to CRE, which is a tax-advantaged asset class with longer investment periods and attractive risk-adjusted returns relative to equities. The new product provides a solution for IRA investors who just experienced a challenging year in the market. CRE typically features more stability and longer holding periods than traditional IRA investments like equities. For instance, during recent market drawdowns like the Great Financial Crisis and Dot-Com recession, equities lost an average of 36% in value, while private real estate averaged a 31.86% gain over the same periods. According to the firm, this makes it a fit for investors hoping to harvest returns for retirement. Ryan Williams, Founder and Executive Chairman of Cadre stated, “I founded Cadre to provide more individuals with a tax-efficient tool that institutions and ultra-high-net-worth investors have traditionally used to build wealth.” By equipping investors with the ability to invest their IRA dollars, we aim to expand access to diversified, robust retirement portfolios – and by extension, generational wealth.”

Finsum:With investors experiencing deep drawdowns in their equity funds during market downturns, real estate investment manager Cadre has launched an IRA option for investors to access commercial real estate, which typically features more stability.

Published in Eq: Real Estate
Tuesday, 21 February 2023 03:08

60/40 Portfolio Can Be Improved with Alternatives

One of the big stories of 2022 was the failure of the 60/40 portfolio. The 40% allocation to bonds is supposed to help protect investors during downturns, but during markets like last year where both stock and bonds fell, the portfolio failed. Now, strategists are looking for ways to improve the 60/40 portfolio. In a recent panel discussion at the New York Stock Exchange, industry experts spoke about “The Rise of Alternatives and the New 60/40 Portfolio.” Asset management professionals and advisers talked about methods to diversify and target new sources of income for retirement savers. Kimberly Ann Flynn, the managing director of XA Investments, said “An available alternative is a mutual fund wrap with added investments such as managed futures and commodity futures, which exist in the category of liquid alternatives.” She added, “I think with now this big push again looking at 60/40, it’s just diversification away from U.S. equity. I think some of these liquid alternatives are going to see a resurgence. In terms of performance, long-short equity performed well, on a relative basis and absolute basis. Some of the managed futures strategies performed really well.” Brian Chiappinelli, a Managing Director at Cambridge Associates, said that another alternative gaining momentum is the collective investment trust (CIT). He stated that “CITs have more leeway to add alternatives that are customized to a particular employee demographic.”

Finsum: After the blood bath in 2022, asset managers and advisors are looking for new ways to improve the 60/40 portfolio, including adding alternatives such as managed futures, commodity futures, or utilizing a CIT.


Published in Wealth Management

Putnam Investments recently announced the availability of Putnam Sustainable Retirement Funds, a target-date series for the retirement savings marketplace. The suite invests in actively managed ESG-focused ETFs managed by Putnam. The funds implement a similar retirement glidepath philosophy as the firm’s other target-date offering, Putnam Retirement Advantage. The series offers vintages for every five years from 2025 through 2065, along with a maturity fund. The Putnam Global Asset Allocation team, which also manages Putnam Retirement Advantage, is responsible for the glidepath and both the tactical and ETF allocations of the Putnam Sustainable Retirement target-date suite. The series was developed in part to respond to the growing interest in sustainable investing within the defined contribution retirement market according to Steven P. McKay, Putnam’s Head of Global Defined Contribution Investment Only. Robert L. Reynolds, President, and Chief Executive Officer, of Putnam Investments, said the following as part of the announcement, “As the retirement marketplace continues to evolve and grow, there is tremendous appetite for meaningful product innovation that creates greater choice of offerings to help working Americans achieve their financial goals.” The funds will invest in ETFs across asset classes managed by the firm, including:


  • Putnam Sustainable Future ETF (NYSE Arca: PFUT)
  • Putnam Sustainable Leaders ETF (NYSE Arca: PLDR)
  • Putnam ESG Core Bond ETF (NYSE Arca: PCRB)
  • Putnam ESG High Yield ETF (NYSE Arca: PHYD)
  • Putnam ESG Ultra Short ETF (NYSE Arca: PULT)
  • Putnam PanAgora ESG Emerging Markets Equity ETF (NYSE Arca: PPEM)
  • Putnam PanAgora ESG International Equity ETF (NYSE Arca: PPIE)

Finsum:Putnam recently announced the availability of Putnam Sustainable Retirement Funds, a target-date series that invests in actively managed ESG-focused ETFs managed by Putnam.

Published in Wealth Management
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