Why Add ESG Funds to Your Investment Menu?

Why Add ESG Funds to Your Investment Menu?

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An increasing number of investors want impact-driven investment vehicles. They want to avoid investing in companies that avoid diversity and inclusion, abuse labor, produce products or provide services that cause health or safety problems, or pollute the environment. However, trying to bypass such companies can make investing in many mutual and index funds a challenge. Because of this, environmental, social, and governance (ESG) funds are increasing in popularity, especially among younger investors. According to a survey conducted by Callan Institute, incorporation of ESG factors into the investment decision-making process increased to 42% in 2019 compared to 22% in 2013. But is it cost-effective and a good fit to include ESG funds in your plan’s investment menu? Learn more about ESG and how you should proceed if you’re interested in adding ESG funds to your investment line up.

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Considerations for Selecting an Index Fund Manager

Considerations for Selecting an Index Fund Manager

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Index funds are passive investments that are designed to mimic the makeup and performance of an underlying market index, such as the S&P 500, at a reduced fee level. According to the Investment Company Institute (ICI), a Washington, D.C.-based mutual fund industry research group, 36% of households in 2018 who owned mutual funds owned at least one equity (stock) index fund. A total of 497 index funds in 2018 had in aggregate assets more than $3.3 trillion. $156 billion in new assets flowed into index funds in 2018 (according to the ICI factbook), distributed as follows:

  • 40% invested in world stock indexes (i.e. FTSE 100–London, Nikkei 225–Tokyo, etc.)
  • 37% invested in domestic stock funds (i.e. NYSE Composite, Russell 2000, etc.)
  • 23% invested in bond or funds made of hybrid indexes (i.e. world and domestic stock funds)

As index funds remain popular among all mutual fund investors, and have grown in usage within retirement plans, it is important to understand the motivation for investors to make these investments. It is equally important to understand what decision-making framework must exist to select an index fund manager to manage investor’s expectations, balancing returns and risks.

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Avoid These Common Plan Sponsor Mistakes

Avoid These Common Plan Sponsor Mistakes

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Once you’ve done the tough work of creating and implementing a retirement plan for your organization, you might assume that it’ll be smooth sailing from this point on. But the ongoing management of a well-functioning retirement plan can be far more challenging than it may seem. With so many different moving parts, it’s not unusual for things to fall through the cracks, even for the most meticulous plan sponsors. Learn more about some of the most common plan sponsor mistakes and how to avoid them.

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Finding the Right OCIO Partner

Finding the Right OCIO Partner

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As financial regulations and global markets become increasingly complex, more organizations have decided to conserve their in-house resources by outsourcing the role of the Chief Investment Officer. Organizations that partner with an outsourced CIO (OCIO) find it to be an effective solution for dedicated expertise, sophisticated research and analytics, and faster investment decision making. However, finding the right OCIO provider is becoming more difficult given the growth in the number of firms providing OCIO services and the complexity of their solutions. Managing the assets of an organization is mission-critical so it’s important not to rush into choosing an OCIO provider that may not be the right fit for your business.

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Defined Contribution Plan Trends that Plan Sponsors Need to Know

Defined Contribution Plan Trends that Plan Sponsors Need to Know

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Defined contribution (DC) plans were designed to help participants become retirement ready. However, nearly 40 years since their introduction, as people who began their careers in that period are hoping to leave the workforce, retirement readiness still tops the lists of concerns for DC plan sponsors and participants. Many employers sought for years to maximize employee participation, educate employees about diverse investment options and use their 401(k) or 403(b) plans to attract and retain staff. However, evidence shows that two thirds of employees with access to plans are not using them to save.

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