Pension funds and their investment consultants

Size: px
Start display at page:

Download "Pension funds and their investment consultants"

Transcription

1 Pension funds and their investment consultants Tim Jenkinson Professor of Finance Director, Private Equity Institute May 2014

2 A mystery Academic evidence, and industry analysis,over several decades has shown that active management in mature asset classes adds no value on average The additional costs outweigh any performance enhancement And while, obviously, some asset managers out-perform each year, returns have been shown to mean-revert So why do pension funds and other large investors continue to chase fools gold? Or, to put it another way, why are there so many active asset managers? Why are Darwinian forces working so slowly? 2

3 Investment consultants Investment consultants advise many retirement plans, foundations, endowments, and other plan sponsors On the asset side, the most important services are money manager search/selection and asset allocation development On the liability side, many ICs are part of organizations that also provide actuarial and liability modelling services Worldwide, $25 trillion of assets are under advisement The industry is concentrated: the top 5 ICs are Hewitt ($4.4 tr), Mercer ($4 tr), Cambridge Associates ($2.5 tr), Russell ($2.4 tr) & Towers Watson ($2.1 tr) A recent survey by Pension and Investments found that 94% of plan sponsors employed ICs 3

4 Conflicts of interest? Investment consultants are the key gatekeepers for asset managers, in their attempts to convince plan sponsors to invest and yet many asset managers, and plan sponsors, seriously doubt their abilities Arguably, they have an interest in complexity, and in plan sponsors believing in active management as it justifies their role in manager selection and increases their fees So the cost to plan sponsors, and society, may be more via the increased fees of active management than the consultants fees per se 4

5 Questions We analyze 1 What drives investment consultants recommendations of institutional funds 2 What impact these recommendations have on flows 3 Whether recommendations add value for plan sponsors 5

6 6

7 7

8 8

9 Data We are the first to use an annual survey of investment consultants recommendations produced by Greenwich Associates We focus on US active equity products for which there is the longest consistent data series Data covers (survey coverage 91% as of 2011) US equities are probably more efficient than other asset classes so may be more difficult to pick winners but they all continue to try 9

10 Recommendations Consultants are asked to recommend 4-6 asset managers (Ams) for each investment style (e.g. Large Cap Growth, Large Cap Value, etc.) Responses are anonymous Consultants also judge fund managers according to: 1. Soft investment factors, i.e. clear decision making, portfolio manager s capability, consistent investment philosophy 2. Service factors, i.e. capable relationship professional, useful reports prepared by fund managers, effective presentations to consultants 10

11 Performance data Assets under management and performance data is derived from evestment, a third-party provider These are institutional products not mutual funds We limit our analysis to US long-only equity products (we eliminate index funds, hedge funds, REITs and retail funds) We also eliminate products in size/style categories not covered by the GA survey (i.e. MidCap Growth and Value before 2001) Data on benchmarks (Russell indexes) is from Datastream and factors (Fama-French-Carhart) from CRSP/Ken French 11

12 Final sample Number of Number of Investment Recommend Consultants ations Number of Products Not Recommend Recommend Total ed ed Average Product Asset Size Not Recommend Recommend Total ed ed , , ,097 5, , ,223 4, , ,266 1,580 2, , ,306 1,663 3, , ,913 2,322 4,056 1,079 1, ,959 2,411 3, , ,930 2,433 4, , ,909 2,435 3,836 1,108 1, ,842 2,399 2, , ,742 2,275 2, , ,672 2,148 3, , ,537 1,991 3, ,490 Large Cap Growth , ,185 Large Cap Value ,610 1,257 2,334 Mid Cap Growth , Mid Cap Value , ,169 Small Cap Growth , Small Cap Value , Core , ,332 12

13 3 Do consultants add value? We create equal- and value-weighted portfolio returns of recommended and not recommended products Returns are gross of asset management fees (evidence from evestment records indicate that intra-style variation in fees is extremely small; see also Busse et al., 2010) Recommended product returns are also gross of invesment consultant fees With these returns we estimate one (CAPM), three (FF) and four (FFC) factor alphas and excess returns over portfolios of selected benchmarks 13

14 Table IV Avg. Returns Avg. Excess Ret. over Benchmark One Factor Alpha Three Factor Alpha Four Factor Alpha Recommended Products 7.13% 1.25% 2.43% 1.14% 1.14% (1.40) (2.14)** (2.63)*** (1.42) (1.36) Equally Weighted Not Recommended Products 8.13% 2.35% 3.52% 2.00% 2.00% (1.59) (3.19)*** (3.30)*** (2.33)** (2.33)** Recommended - Not Recommended Products -1.00% -1.10% -1.09% -0.85% -0.86% (2.01)** (-3.03)*** (2.49)** (2.31)** (2.33)** Recommended Products 4.90% 0.96% 0.18% 0.39% 0.39% (0.92) (1.26) (0.22) (0.48) (0.48) Value Weighted Not Recommended Products 5.16% 0.57% 0.55% -0.32% -0.23% (1.02) (0.73) (0.55) (-0.41) (-0.31) Recommended - Not Recommended Products -0.26% 0.40% -0.37% 0.72% 0.62% (-0.20) (0.51) (-0.29) (0.73) (0.68) 14

15 Summary and conclusions Consultants recommendations are a function of past fund performance, but also of other factors (service and investment) Not merely a return chasing strategy They have a large and significant effect on flows into (and out of) institutional investment products But they fail consistently to add value in US equities for plan sponsors The underperformance of recommended products can be explained by consultants tendency to recommend relatively large products However, even allowing for this constraint (legitimate or not), recommended products still fail consistently to outperform 15

16 Why the attention? Because Investment Consultants are so powerful Asset managers seem to be extremely skeptical about IC s abilities but to question them could be very costly Trustees seem to think of ICs as, to some extent, an insurance against being sued But ICs have no interest in simplicity they encourage trustees in their search for fools gold and the costs are borne by the pensioners and other beneficiaries It is time that the performance of ICs was subject to proper scrutiny but their reaction to this paper has been to threaten to withdraw from the GA survey 16

17 Passive presumption Should there be a passive presumption for pension fund trustees? Only if they can articulate why they believe the active managers they choose will add value should they pay the additional fees And they should then subject themselves to careful monitoring to see whether they did beat passive strategies 17

18 More? Take a look at Picking Winners? Investment Consultants Recommendations of Fund Managers, by Tim Jenkinson, Howard Jones and Jose Vicente Martinez Or Google Tim Jenkinson 18

19 Extra slides 19

20 1 What drives recommendations? We estimate a Poisson model, with the standard exponential mean parameterization, on pooled yearly data We estimate the impact of past returns, return volatility, soft investment factors, and service factors Consultants recommendations are partly driven by past fund performance, but also by other factors (service and investment quality factors) Not merely a return chasing strategy Indeed, the soft investment factors and service factors are economically much more important 20

21 2 Recommendations & flows We consider two measures: A) $ flows and B) % flows Bivariate relationship between flows and recommendation changes Flow-performance regressions confirm that recommendations have a large and significant effect on flows into (and out of) institutional investment products 21

22 Product Size Investment consultants recommendations tend to be concentrated on large products Recommended products are 4 times as large as non-recommended ones (although partly as a result of recommendations attracting assets) Research shows that funds that manage more assets tend to perform worse (Chen et al, 2004) The preference for recommending large products may not be entirely free; consultants may be inclined to recommend large products due to liquidity reasons or doubts about the ability of small products to handle a larger pool of assets We then control for size, and still find that recommended products tend to underperform, although not significantly (see Table VII) 22

23 Changes in recommendations We also look at the relationship between recommendation changes and product performance So all these products have been considered appropriate for institutional investors We identify products that experience a net increase (decrease) in the number of recommendations and follow them for 12 / 24 months Net increases/decreases indicate whether, on average, a given product is being added/withdrawn from consultants shortlists We form portfolios and estimate one (CAPM), three (FF) and four (FFC) factor alphas and excess returns over portfolios of selected benchmarks 23

24 Table VIII 12 Month Period Following Addition/Deletion Avg. Returns Avg. Excess Ret. over Benchmark One Factor Alpha Three Factor Alpha Four Factor Alpha Increase in Number of Recommendations 5.34% 0.62% 2.26% 0.99% 0.94% (0.95) (1.02) (2.31)** (1.25) (1.19) Equally Weighted Decrease in Number of Recommendations 6.58% 1.19% 3.55% 1.48% 1.54% (1.20) (2.13)** (2.34)** (1.21) (1.32) Difference -1.24% -0.57% -1.29% -0.49% -0.59% (-0.86) (-0.80) (-0.89) (-0.49) (-0.69) Increase in Number of Recommendations 2.12% -0.35% -0.98% -0.22% -0.30% (0.36) (-0.24) (-0.56) (-0.19) (-0.29) Value Weighted Decrease in Number of Recommendations 4.62% 0.54% 1.63% 0.74% 0.81% (0.90) (0.75) (1.09) (0.67) (0.78) Difference -2.51% -0.89% -2.61% -0.97% -1.12% (-0.83) (-0.54) (-0.88) (-0.50) (-0.65) 24

Internet Appendix to Picking Winners? Investment Consultants Recommendations of Fund Managers

Internet Appendix to Picking Winners? Investment Consultants Recommendations of Fund Managers Internet Appendix to Picking Winners? Investment Consultants Recommendations of Fund Managers TIM JENKINSON, HOWARD JONES, and JOSE VICENTE MARTINEZ * This Internet Appendix includes the following additional

More information

Picking winners? Investment consultants' recommendations of fund managers

Picking winners? Investment consultants' recommendations of fund managers Picking winners? Investment consultants' recommendations of fund managers Tim Jenkinson, Howard Jones, and Jose Vicente Martinez* Abstract Investment consultants advise plan sponsors how to invest $25

More information

Picking winners? Investment consultants' recommendations of fund managers

Picking winners? Investment consultants' recommendations of fund managers Picking winners? Investment consultants' recommendations of fund managers Tim Jenkinson, Howard Jones, and Jose Vicente Martinez 1 Abstract U.S. plan sponsors managing over $13 trillion rely on investment

More information

Sophisticated investments. Simple to use.

Sophisticated investments. Simple to use. Russell LifePoints INSTITUTIONAL TARGET DATE FUNDS Sophisticated investments. Simple to use. INVESTED. TOGETHER. Now your default option can be your best option. If your target date funds are projected

More information

What s in a Name: White-Label Funds in DC Plans

What s in a Name: White-Label Funds in DC Plans What s in a Name: White-Label Funds in DC Plans October 2014 Hewitt EnnisKnupp, An Aon Company 2014 Aon plc What s in a Name? That which we call a rose by any other name would smell as sweet. Much like

More information

Investment Strategy for Pensions Actuaries A Multi Asset Class Approach

Investment Strategy for Pensions Actuaries A Multi Asset Class Approach Investment Strategy for Pensions Actuaries A Multi Asset Class Approach 16 January 2007 Representing Schroders: Neil Walton Head of Strategic Solutions Tel: 020 7658 2486 Email: Neil.Walton@Schroders.com

More information

The Re-Emergence of Collective Investment Trust Funds

The Re-Emergence of Collective Investment Trust Funds Manning & Napier Advisors, LLC The Re-Emergence of Collective Investment Trust Funds June 2011 Manning & Napier Advisors, LLC provides investment advisory services to Exeter Trust Company ( ETC ), Trustee

More information

Building and Interpreting Custom Investment Benchmarks

Building and Interpreting Custom Investment Benchmarks Building and Interpreting Custom Investment Benchmarks A White Paper by Manning & Napier www.manning-napier.com Unless otherwise noted, all fi gures are based in USD. 1 Introduction From simple beginnings,

More information

Principles for investment success. We believe you will give yourself the best chance of investment success if you focus on what you can control

Principles for investment success. We believe you will give yourself the best chance of investment success if you focus on what you can control Principles for investment success We believe you will give yourself the best chance of investment success if you focus on what you can control Important information This guide has been produced for educational

More information

What Level of Incentive Fees Are Hedge Fund Investors Actually Paying?

What Level of Incentive Fees Are Hedge Fund Investors Actually Paying? What Level of Incentive Fees Are Hedge Fund Investors Actually Paying? Abstract Long-only investors remove the effects of beta when analyzing performance. Why shouldn t long/short equity hedge fund investors

More information

LC Paper No. CB(1)1621/05-06(01)

LC Paper No. CB(1)1621/05-06(01) LC Paper No. CB(1)1621/05-06(01) Response to the follow up questions for the FA Panel meeting held on 4 May 2006 a. The size, portfolio, return and relevant parameters of the Norwegian Government Pension

More information

Collective. Prepared by the Coalition of Collective. Investment Trusts

Collective. Prepared by the Coalition of Collective. Investment Trusts Collective Investment Trusts Prepared by the Coalition of Collective Investment Trusts Table of Contents Overview... 2 Collective Investment Trusts Defined... 3 Two Broad Types of Collective Trusts...

More information

8 Threats. to PortfolioPerformance. Threat 2: Many Active Mutual Fund Managers Have Failed to Beat the Market

8 Threats. to PortfolioPerformance. Threat 2: Many Active Mutual Fund Managers Have Failed to Beat the Market 8 Threats to PortfolioPerformance The last decade has been a challenge for many investors, especially those investing for the long-term and retirement. Given declines in global stock markets, many investors

More information

The best of both worlds A look at the complementary nature of active and passive investing

The best of both worlds A look at the complementary nature of active and passive investing PART 1: Introduction The best of both worlds A look at the complementary nature of active and passive investing Although the active versus passive investing debate may continue in the media, 2013 proved

More information

Defined Contribution Pension Plans: Sticky or Discerning Money?

Defined Contribution Pension Plans: Sticky or Discerning Money? Defined Contribution Pension Plans: Sticky or Discerning Money? Clemens Sialm University of Texas at Austin Laura Starks University of Texas at Austin Hanjiang Zhang Nanyang Technological University, Singapore

More information

GLOSSARY OF INVESTMENT-RELATED TERMS FOR NATIONAL ELECTRICAL ANNUITY PLAN PARTICIPANTS

GLOSSARY OF INVESTMENT-RELATED TERMS FOR NATIONAL ELECTRICAL ANNUITY PLAN PARTICIPANTS GLOSSARY OF INVESTMENT-RELATED TERMS FOR NATIONAL ELECTRICAL ANNUITY PLAN PARTICIPANTS General Information This Glossary of Investment-Related Terms for National Electrical Annuity Plan Participants (the

More information

CI LifeCycle Portfolios

CI LifeCycle Portfolios Portfolios Portfolios Portfolios are sophisticated multi-asset class, multi-manager target date retirement funds offered exclusively by CI Institutional Asset Management as an option for pension plan sponsors

More information

Active and passive investing What you need to know

Active and passive investing What you need to know Active and passive investing What you need to know This guide has been produced for educational purposes only and should not be regarded as a substitute for investment advice. Vanguard Asset Management,

More information

Evaluating Target Date Funds. 2003 2013 Multnomah Group, Inc. All Rights Reserved.

Evaluating Target Date Funds. 2003 2013 Multnomah Group, Inc. All Rights Reserved. 2003 2013 Multnomah Group, Inc. All Rights Reserved. Scott Cameron, CFA Scott is the Chief Investment Officer for the Multnomah Group and a Founding Principal of the firm. In that role, Scott leads Multnomah

More information

The Well-Tempered Investment Policy Statement

The Well-Tempered Investment Policy Statement FIDUCIARY FOCUS: The Well-Tempered Investment Policy Statement This material is an educational discussion of Investment Policy Statements which provides ideas and suggestions on this topic and should not

More information

Evaluating Target Date Funds. 2003 2015 Multnomah Group, Inc. All Rights Reserved.

Evaluating Target Date Funds. 2003 2015 Multnomah Group, Inc. All Rights Reserved. 2003 2015 Multnomah Group, Inc. All Rights Reserved. Scott Cameron, CFA Scott is the Chief Investment Officer for the Multnomah Group and a Founding Principal of the firm. In this role, Scott leads Multnomah

More information

Research Paper Nr. 3 / 2013 English Translation. Asset Manager Selection based on historical performance

Research Paper Nr. 3 / 2013 English Translation. Asset Manager Selection based on historical performance Research Paper Nr. 3 / 2013 English Translation Asset Manager Selection based on historical performance Management Summary Historical performance is a frequently used criterion to select asset managers.

More information

Quantitative Asset Manager Analysis

Quantitative Asset Manager Analysis Quantitative Asset Manager Analysis Performance Measurement Forum Dr. Stephan Skaanes, CFA, CAIA, FRM PPCmetrics AG Financial Consulting, Controlling & Research, Zurich, Switzerland www.ppcmetrics.ch Copenhagen,

More information

Spreading investment risk

Spreading investment risk 1 Spreading investment risk Spreading investment risk Why and how should I diversify my assets? 1 Spreading investment risk Contact: Doug Steevens FIA Portfolio Manager +44 (0)20 7086 9312 douglas.steevens@aonhewitt.com

More information

Product and Distribution Update: Looking Beyond the Headlines

Product and Distribution Update: Looking Beyond the Headlines HIGHLIGHTS OF A WEB SEMINAR FOR SEI CLIENTS Product and Distribution Update: Looking Beyond the Headlines Mutual funds, ETFs, managed accounts and alternatives all of these product categories enjoyed robust

More information

The Fundamentals of Asset Class Investing

The Fundamentals of Asset Class Investing The Fundamentals of Asset Class Investing The first goal of any financial plan should be to avoid outliving your money. FPO IMAGE NEED FINAL SELECTION 1 Investing is About You We are living longer. No

More information

The Case for Active Management in the Large Cap Growth Equity Universe

The Case for Active Management in the Large Cap Growth Equity Universe The Case for Active Management in the Large Cap Growth Equity Universe Pioneer US Concentrated Growth Strategy This case for active management examines risk-adjusted returns among large cap growth managers

More information

The Lam Group Newsletter Vol. 2, No. 1 First Quarter 2002

The Lam Group Newsletter Vol. 2, No. 1 First Quarter 2002 The Lam Group Newsletter Vol. 2, No. 1 First Quarter 2002 What I Am Thinking - Big Picture Active vs. Passive Investment Management January Investment Results An Advertisement for The Lam Group What I

More information

Pursuing a Better Investment Experience

Pursuing a Better Investment Experience Pursuing a Better Investment Experience Last updated: March 2015 1. Embrace Market Pricing World Equity Trading in 2014 Daily Average Number of Trades 60 million Dollar Volume $302 billion The market is

More information

Fiduciary Management. What is Fiduciary Management?

Fiduciary Management. What is Fiduciary Management? Fiduciary Management What is Fiduciary Management? Fiduciary Management can be defined as a pension management solution which focuses on achieving the long term goals of a pension fund within a defined

More information

RETIREE HEALTH CARE BENEFIT TRUST ANNUAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2010 PREPARED BY MARTHA O. HAYNIE, CPA ORANGE COUNTY COMPTROLLER

RETIREE HEALTH CARE BENEFIT TRUST ANNUAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2010 PREPARED BY MARTHA O. HAYNIE, CPA ORANGE COUNTY COMPTROLLER RETIREE HEALTH CARE BENEFIT TRUST ANNUAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2010 PREPARED BY MARTHA O. HAYNIE, CPA ORANGE COUNTY COMPTROLLER EXECUTIVE SUMMARY The portfolio had a total rate of return

More information

J.H. ELLWOOD & ASSOCIATES, INC. 33 West Monroe, Suite 1850 Chicago, IL 60603 (312) 782-5432 www.ellwoodassociates.com.

J.H. ELLWOOD & ASSOCIATES, INC. 33 West Monroe, Suite 1850 Chicago, IL 60603 (312) 782-5432 www.ellwoodassociates.com. J.H. ELLWOOD & ASSOCIATES, INC. 33 West Monroe, Suite 1850 Chicago, IL 60603 (312) 782-5432 www.ellwoodassociates.com March 31, 2015 This brochure provides information about the qualifications and business

More information

To have the ability to pay all benefits obligations when requested.

To have the ability to pay all benefits obligations when requested. INVESTMENT POLICY STATEMENT FOR: Alliance Benefit Group Health Savings Account Program I. GENERAL Purpose and Overview The Alliance Benefit Group Health Savings Account Program ( Program ) was established

More information

A Primer for Investment Trustees (a summary)

A Primer for Investment Trustees (a summary) A Primer for Investment Trustees (a summary) Jeffrey V. Bailey, CFA, Jesse L. Phillips, CFA, and Thomas M. Richards, CFA Investment trustees oversee the investments and investment process for a variety

More information

Investment Portfolio Management Techniques for Fixed Income, Equity and Alternative Investments

Investment Portfolio Management Techniques for Fixed Income, Equity and Alternative Investments Investment Portfolio Management Techniques for Fixed Income, Equity and Alternative Investments www.mce-ama.com/2400 Senior Managers Days 4 www.mce-ama.com 1 WHY attend this programme? Managing an investment

More information

BASKET A collection of securities. The underlying securities within an ETF are often collectively referred to as a basket

BASKET A collection of securities. The underlying securities within an ETF are often collectively referred to as a basket Glossary: The ETF Portfolio Challenge Glossary is designed to help familiarize our participants with concepts and terminology closely associated with Exchange- Traded Products. For more educational offerings,

More information

Investment Fiduciary Governance Commission Outcomes Under the Current Governance Model

Investment Fiduciary Governance Commission Outcomes Under the Current Governance Model As part of its role in assisting the Commission, Hewitt EnnisKnupp (HEK) was asked to provide to the Commission for its consideration as background, an independent evaluation of the outcomes under the

More information

The Master Statement of Investment Policies and Objectives of The Lower Colorado River Authority Retirement Plan and Trust. Amended June 16, 2015

The Master Statement of Investment Policies and Objectives of The Lower Colorado River Authority Retirement Plan and Trust. Amended June 16, 2015 The Master Statement of Investment Policies and Objectives of The Lower Colorado River Authority Retirement Plan and Trust Amended June 16, 2015 Introduction The Lower Colorado River Authority ( LCRA )

More information

Intro on Hedge Funds AQF-2005

Intro on Hedge Funds AQF-2005 Intro on Hedge Funds AQF-2005 1 Hedge Funds What are hedge funds? Why is their performance measurement different from that of regular mutual funds? How should we analyze their performance? 2 What is a

More information

What you will learn today. Different categories of investments Choosing your investment mix Common investor pitfalls Determining your next steps

What you will learn today. Different categories of investments Choosing your investment mix Common investor pitfalls Determining your next steps Investing 101 What you will learn today Different categories of investments Choosing your investment mix Common investor pitfalls Determining your next steps 2 Asset Allocation One of Your Most Important

More information

Real estate and infrastructure investments by Norwegian GPFG

Real estate and infrastructure investments by Norwegian GPFG Real estate and infrastructure investments by Norwegian GPFG Comments by Karin S. Thorburn Research Chair Professor of Finance Norwegian School of Economics Oslo December 17, 2015 1 / 11 GPFG already holds

More information

Overview of Your TIAA-CREF Investment Solutions SM Accounts

Overview of Your TIAA-CREF Investment Solutions SM Accounts Overview of Your TIAA-CREF Investment Solutions SM Accounts TIAA-CREF Investment Solutions SM now offers you nine mutual funds in addition to our fixed and variable annuity accounts. TIAA-CREF Investment

More information

INVESTMENT POLICY. Wharton County Junior College Endowment Fund PURPOSE

INVESTMENT POLICY. Wharton County Junior College Endowment Fund PURPOSE Endowment Fund INVESTMENT POLICY PURPOSE This document is the official policy governing the investment practices of the Wharton County Junior College Endowment Fund (the WCJCEF or Endowment ). The policies

More information

BRINKER CAPITAL OVERVIEW. Helping You Invest with Confidence

BRINKER CAPITAL OVERVIEW. Helping You Invest with Confidence BRINKER CAPITAL OVERVIEW Helping You Invest with Confidence PARTIALLY INVESTED PERIODIC INVESTMENT FULLY INVESTED Unwavering Focus on Investment Excellence For more than 25 years, Brinker Capital has been

More information

INDEPENDENT SCHOOL DISTRICT #877 POLICY. Buffalo-Hanover-Montrose. POLICY TITLE Investments OPEB CODE NO. 705.1

INDEPENDENT SCHOOL DISTRICT #877 POLICY. Buffalo-Hanover-Montrose. POLICY TITLE Investments OPEB CODE NO. 705.1 INDEPENDENT SCHOOL DISTRICT #877 POLICY Buffalo-Hanover-Montrose INDEX TITLE Noninstructional Operations and Business Services SERIES NO. 700 POLICY TITLE Investments OPEB CODE NO. 705.1 I. Purpose The

More information

Manager Structure Presentation

Manager Structure Presentation Presentation to the Tobacco Settlement Investment Board May 18, 2009 Millie Viqueira Senior Vice President Jay Kloepfer Executive Vice President Callan Associates Inc. 200 Park Avenue, Suite 230 Florham

More information

MLC MasterKey Unit Trust Product Disclosure Statement (PDS)

MLC MasterKey Unit Trust Product Disclosure Statement (PDS) MLC MasterKey Unit Trust Product Disclosure Statement (PDS) Preparation date 1 July 2014 Issued by MLC Investments Limited (MLC) ABN 30 002 641 661 AFSL 230705 This information is general and doesn t take

More information

Part 2A Appendix 1 of Form ADV Wrap Fee Program Brochure

Part 2A Appendix 1 of Form ADV Wrap Fee Program Brochure Part 2A Appendix 1 of Form ADV Wrap Fee Program Brochure D.A. Davidson & Co. 8 Third Street North Great Falls, MT 59401 406 727 4200 www.dadavidson.com May 16, 2016 This wrap fee program brochure provides

More information

Measuring Success in Fixed Income

Measuring Success in Fixed Income Measuring Success in Fixed Income Avoiding the Unwanted Risks and Costs when Investors confuse Alpha and Beta November 2012 Hewitt EnnisKnupp, An Aon Company Copyright Aon plc 2012 Consulting Investment

More information

Investing on hope? Small Cap and Growth Investing!

Investing on hope? Small Cap and Growth Investing! Investing on hope? Small Cap and Growth Investing! Aswath Damodaran Aswath Damodaran! 1! Who is a growth investor?! The Conventional definition: An investor who buys high price earnings ratio stocks or

More information

Understanding the Fees Charged Within Fiduciary Management

Understanding the Fees Charged Within Fiduciary Management Aon Hewitt Delegated Consulting Services Understanding the Fees Charged Within Fiduciary Management January 2014 Risk. Reinsurance. Human Resources. Table of contents Overview...2 What are the fee components?...3

More information

Investment Return Assumptions for Public Funds

Investment Return Assumptions for Public Funds Callan InvesTmenTs InsTITuTe ReseaRCH June 2010 Investment Return Assumptions for Public Funds The Historical Record The return assumptions that public defined benefit plans use to calculate both future

More information

Active U.S. Equity Management THE T. ROWE PRICE APPROACH

Active U.S. Equity Management THE T. ROWE PRICE APPROACH PRICE PERSPECTIVE October 2015 Active U.S. Equity Management THE T. ROWE PRICE APPROACH In-depth analysis and insights to inform your decision-making. EXECUTIVE SUMMARY T. Rowe Price believes that skilled

More information

Low Volatility Equity Strategies: New and improved?

Low Volatility Equity Strategies: New and improved? Low Volatility Equity Strategies: New and improved? Jean Masson, Ph.D Managing Director, TD Asset Management January 2014 Low volatility equity strategies have been available to Canadian investors for

More information

CalPERS 457 Plan Target Retirement Date Funds

CalPERS 457 Plan Target Retirement Date Funds CalPERS 457 Plan Target Retirement Date s September 30, 2015 Overview Target Retirement Date s (the "" or "s") are a series of diversified funds, each of which has a predetermined underlying asset mix

More information

Prospectus Socially Responsible Funds

Prospectus Socially Responsible Funds Prospectus Socially Responsible Funds Calvert Social Investment Fund (CSIF) Balanced Portfolio Equity Portfolio Enhanced Equity Portfolio Bond Portfolio Money Market Portfolio Calvert Social Index Fund

More information

GW Contracted-out Money Purchase Scheme ( the Scheme ) Statement of Investment Principles

GW Contracted-out Money Purchase Scheme ( the Scheme ) Statement of Investment Principles GW Contracted-out Money Purchase Scheme ( the Scheme ) Statement of Principles This Statement of Principles (SIP) covers the defined contribution section of the Scheme. It is set out in three parts: 1)

More information

2014 KPMG UK Fiduciary Management Market Survey

2014 KPMG UK Fiduciary Management Market Survey INVESTMENT ADVISORY 2014 KPMG UK Fiduciary Management Market Survey November 2014 kpmg.com/uk 1 2014 KPMG UK FIDUCIARY MANAGEMENT MARKET SURVEY 2 The survey results presented are based on the responses

More information

Peralta Community College District Retiree Health Care Plan Investment Policy Statement and Investment Guidelines

Peralta Community College District Retiree Health Care Plan Investment Policy Statement and Investment Guidelines Peralta Community College District Retiree Health Care Plan Investment Policy Statement and Investment Guidelines Table of Contents I. Purpose of Investment Policy Statement II. Definition and Function

More information

Why Are Institutional Investors Missing the International Small Cap Opportunity?

Why Are Institutional Investors Missing the International Small Cap Opportunity? Why Are Institutional Investors Missing the International Small Cap Opportunity? October 2011 Chris Tessin, CFA ctessin@acuitasinvestments.com Dennis Jensen, CFA djensen@acuitasinvestments.com Brian Stoner,

More information

Bringing Alternatives Within Reach

Bringing Alternatives Within Reach Bringing Alternatives Within Reach Goldman Sachs Multi-Manager Alternatives Fund (Ticker: GSMMX) Mutual funds pursuing alternative investment strategies, also known as alternative mutual funds, open up

More information

The Michigan Tech Fund STATEMENT OF INVESTMENT POLICY

The Michigan Tech Fund STATEMENT OF INVESTMENT POLICY The Michigan Tech Fund STATEMENT OF INVESTMENT POLICY APPROVED JULY 31,2013 TABLE OF CONTENTS Executive Summary... 2 Introduction and Purpose... 3 Scope of Policy... 4 Delegation of Responsibilities...

More information

Learn about active and passive investing. Investor education

Learn about active and passive investing. Investor education Learn about active and passive investing Investor education Active, passive or both: Which is right for you? Portfolios can be built using actively managed and index mutual funds either individually or

More information

Good Practice Checklist

Good Practice Checklist Investment Governance Good Practice Checklist Governance Structure 1. Existence of critical decision-making bodies e.g. Board of Directors, Investment Committee, In-House Investment Team, External Investment

More information

Presentation - March, 2011. Jeff Hooke Managing Director, Focus Securities

Presentation - March, 2011. Jeff Hooke Managing Director, Focus Securities CFA Society - Atlanta Presentation - March, 2011 Jeff Hooke Managing Director, Focus Securities Author, Security Analysis on Wall Street Topics for Today 1. Background and Private Equity Underperformance

More information

Glossary of Investment Terms

Glossary of Investment Terms online report consulting group Glossary of Investment Terms glossary of terms actively managed investment Relies on the expertise of a portfolio manager to choose the investment s holdings in an attempt

More information

Mutual Funds and Other Investment Companies. Chapter 4

Mutual Funds and Other Investment Companies. Chapter 4 Mutual Funds and Other Investment Companies Chapter 4 Investment Companies financial intermediaries that collect funds from individual investors and invest in a portfolio of assets shares = claims to portfolio

More information

When rates rise, do stocks fall?

When rates rise, do stocks fall? PRACTICE NOTE When rates rise, do stocks fall? The performance of equities and other return-seeking assets in rising and falling interest rate scenarios, January 1970 through September 2013 William Madden,

More information

Finding outperforming managers. Randolph B. Cohen Harvard Business School

Finding outperforming managers. Randolph B. Cohen Harvard Business School Finding outperforming managers Randolph B. Cohen Harvard Business School 1 Conventional wisdom holds that: Managers can t pick stocks and therefore don t beat the market It s impossible to pick winning

More information

Since September 11, 2006, at least ten ERISAbased

Since September 11, 2006, at least ten ERISAbased ERISA-Based Class Actions Attack Fees Charged to 401(k) Plans: But Are They Really Just Excessive Fee Cases? By Paul Ondrasik, Melanie Nussdorf, and Eric Serron Since September 11, 2006, at least ten ERISAbased

More information

Investment Education Series

Investment Education Series Investment Education Series Types of Investment Funds Introduction Investment fund basically refers to a pool of funds, but our focus in this edition of GTBAM education series is to highlight the features,

More information

Unique considerations in evaluating liability-driven investment managers

Unique considerations in evaluating liability-driven investment managers By: Ryan Dembinsky, Senior Research Analyst JANUARY 2013 Unique considerations in evaluating liability-driven investment managers Relative to traditional fixed income investing, liability-driven investing

More information

ASA JP Morgan 401k Plan

ASA JP Morgan 401k Plan ASA JP Morgan 401k Plan Research Change is Good, Right? By now you have received notice that there are some changes happening within the ASA JPMorgan 401k plan. The good news is some of the funds are getting

More information

VALUE ADDED INDEXING SM PERSPECTIVES. Top Ten List: Why Passive Investing Wins SUMMARY:

VALUE ADDED INDEXING SM PERSPECTIVES. Top Ten List: Why Passive Investing Wins SUMMARY: VALUE ADDED INDEXING SM PERSPECTIVES Top Ten List: Why Passive Investing Wins SUMMARY: Too often the active vs. passive investing debate focuses only on performance. While research shows passive strategies

More information

Investment Philosophies: Introduction

Investment Philosophies: Introduction Investment Philosophies: Introduction Aswath Damodaran www.damodaran.com Aswath Damodaran! 1! What is an investment philosophy? What is it? An investment philosophy is a coherent way of thinking about

More information

Prudent Practices for Investment Stewards

Prudent Practices for Investment Stewards Step 1: Organize Prudent Practices for Investment Stewards Practice 1.1 - The Investment Steward demonstrates an awareness of fiduciary duties and responsibilities. 1.1.1 The Investment Steward complies

More information

Russell Funds Russell Tax Exempt Bond Fund Money Manager and Russell Overview September 2015

Russell Funds Russell Tax Exempt Bond Fund Money Manager and Russell Overview September 2015 Money Manager and Russell Overview September 2015 Russell s investment approach Russell uses a multi-asset approach to investing, combining asset allocation, manager selection and ongoing portfolio management

More information

Investment Policy Statement

Investment Policy Statement Investment Policy Statement Prepared on: February 04, 2013 Prepared for: Sample Individual Client 432 Elm St Chicago IL 60630 Executive Summary Client Name: Sample Individual Client Client Type: Individual

More information

2011 PENSIONS, RETIREMENT SECURITY, AND STRATEGIES FOR INVESTMENT CONFERENCE

2011 PENSIONS, RETIREMENT SECURITY, AND STRATEGIES FOR INVESTMENT CONFERENCE 2011 PENSIONS, RETIREMENT SECURITY, AND STRATEGIES FOR INVESTMENT CONFERENCE The Changing Landscape of Financial Service Providers: What Does It Mean for Investing for Security in Retirement? John F. Casey

More information

Fiduciary Management. What it should deliver to your fund

Fiduciary Management. What it should deliver to your fund Fiduciary Management What it should deliver to your fund The Concept Fiduciary Management is a comprehensive investment management service which enables institutional investors to realise their strategic

More information

Index investing. A simple, low-cost solution for retirement plans

Index investing. A simple, low-cost solution for retirement plans Index investing A simple, low-cost solution for retirement plans Index investing: A simple, low-cost solution for retirement plans Despite the challenging economic conditions of the last few years, employers

More information

Statement of Investment and Administrative Policies & Procedures. Defined Contribution Pension Plan and RRSP for Nipissing University Employees

Statement of Investment and Administrative Policies & Procedures. Defined Contribution Pension Plan and RRSP for Nipissing University Employees Statement of Investment and Administrative Policies & Procedures Defined Contribution Pension Plan and RRSP for Nipissing University Employees Approved and adopted effective October 2008 Last revised:

More information

SPDR S&P 400 Mid Cap Value ETF

SPDR S&P 400 Mid Cap Value ETF SPDR S&P 400 Mid Cap Value ETF Summary Prospectus-October 31, 2015 Before you invest in the SPDR S&P 400 Mid Cap Value ETF (the Fund ), you may want to review the Fund's prospectus and statement of additional

More information

REPORT ON INVESTMENT ACTIVITY Prepared by Sheila Morgan-Johnson, Chief Investment Officer

REPORT ON INVESTMENT ACTIVITY Prepared by Sheila Morgan-Johnson, Chief Investment Officer Prepared by Sheila Morgan-Johnson, Chief Investment Officer I. Introduction The District of Columbia Retirement Board (the Board ), a defined benefit plan, manages and controls the assets of the Teachers

More information

Managed Volatility: A Highly Risk-Efficient Approach to Investing in Emerging Markets

Managed Volatility: A Highly Risk-Efficient Approach to Investing in Emerging Markets Managed Volatility: A Highly Risk-Efficient Approach to Investing in Emerging Markets Executive Summary Adrian Banner, Ph.D. INTECH Chief Executive Officer Chief Investment Officer abanner@intechjanus.com

More information

Essentials of Investing. Stacie Mintz Portfolio Manager Quantitative Management Associates

Essentials of Investing. Stacie Mintz Portfolio Manager Quantitative Management Associates January 2012 Essentials of Investing Stacie Mintz Portfolio Manager Quantitative Management Associates Why Invest? Grow Assets Save for specific financial goals Fund operations/charitable giving Maintain

More information

Fiduciary/Investment Training for Trustees of Retirement and OPEB Funds

Fiduciary/Investment Training for Trustees of Retirement and OPEB Funds Presentation to Rhode Island GFOA Fiduciary/Investment Training for Trustees of Retirement and OPEB Funds October 30, 2014 PANEL INTRODUCTIONS MAUREEN TOAL Public Agency Retirement Services (PARS) Senior

More information

Interest Rates and Inflation: How They Might Affect Managed Futures

Interest Rates and Inflation: How They Might Affect Managed Futures Faced with the prospect of potential declines in both bonds and equities, an allocation to managed futures may serve as an appealing diversifier to traditional strategies. HIGHLIGHTS Managed Futures have

More information

UMA Model Portfolios Professional Advice for Your Unified Managed Account

UMA Model Portfolios Professional Advice for Your Unified Managed Account UMA Model Portfolios Professional Advice for Your Unified Managed Account B The introduction of unified managed accounts has helped many investors to consolidate and streamline their investment portfolios.

More information

AH&T FIDUCIARY INVESTMENT REVIEW. December 31, 2011

AH&T FIDUCIARY INVESTMENT REVIEW. December 31, 2011 AH&T FIDUCIARY INVESTMENT REVIEW December 3, 2 FIDUCIARY INVESTMENT REVIEW AH&T presented by: Jim Maulfair Financial Services Director Armfield, Harrison & Thomas, Inc. 2 S. King St. Leesburg, VA 275 Phone:

More information

Equity Investing Evolved Manage risk, stay invested

Equity Investing Evolved Manage risk, stay invested Equity Investing Evolved Manage risk, stay invested HSBC Buffered Strategies Are you on track to meet your retirement and investment goals? Have extreme market swings prevented you from investing? Would

More information

INVESTMENT POLICY STATEMENT Valued Client

INVESTMENT POLICY STATEMENT Valued Client INVESTMENT POLICY STATEMENT Valued Client August 17, 2010 PREPARED BY: John Ohl Bay Colony Advisors 91 Main St STE 308 Concord, Massachusetts 01742 (978) 369-7200 John@baycolonyadvisors.com www.baycolonyadvisors.com

More information

Your Guide to Investment Changes to the Halliburton Retirement and Savings Plan

Your Guide to Investment Changes to the Halliburton Retirement and Savings Plan Your Guide to Investment Changes to the Halliburton Retirement and Savings Plan Building Smart Investments New Investment Options Coming in June The Halliburton Retirement and Savings Plan (the Plan )

More information

Variable Annuity Pension Plans: A Balanced Approach to Retirement Risk

Variable Annuity Pension Plans: A Balanced Approach to Retirement Risk Variable Annuity Pension Plans: A Balanced Approach to Retirement Kelly Coffing, EA, FSA, MAAA Principal and Consulting Actuary Milliman, Seattle, Washington Grant Camp, EA, FSA, MAAA, Consulting Actuary

More information

GSK Pension Scheme ( the Scheme ) Statement of Investment Principles

GSK Pension Scheme ( the Scheme ) Statement of Investment Principles GSK Pension Scheme ( the Scheme ) Statement of Investment Principles This Statement of Investment Principles (SIP) covers the defined benefit and the defined contribution sections of the Scheme. It is

More information

Long Term Investment Pool (LTIP) Investment Policy Statement Level 1

Long Term Investment Pool (LTIP) Investment Policy Statement Level 1 Long Term Investment Pool (LTIP) Level 1 CONTENTS I. OVERVIEW II. FINANCIAL GOALS OF THE LTIP III. INVESTMENT OBJECTIVES OF THE LTIP IV. INVESTMENT STRATEGIES OF THE LTIP V. PORTFOLIO REBALANCING VI. ASSET

More information

How To Choose A 401(K) Plan Investment

How To Choose A 401(K) Plan Investment Supplemental Income 401(k) Plan This document contains important information concerning our retirement plan. The first section provides you with information about the plan in general, including any expenses

More information

Emini Education - Managing Volatility in Equity Portfolios

Emini Education - Managing Volatility in Equity Portfolios PH&N Trustee Education Seminar 2012 Managing Volatility in Equity Portfolios Why Equities? Equities Offer: Participation in global economic growth Superior historical long-term returns compared to other

More information