BrightScope Unveils Latest Trends in Target Date Funds
Most Notable Findings: Strong Target Date Asset Growth; Fees Continue to Trend Downward; and Six New Series Enter the Market
(firmenpresse) - SAN DIEGO, CA -- (Marketwired) -- 05/05/15 -- BrightScope (), a leading provider of independent financial information and investment research, today announced recent trends in target date funds (TDFs) as a result of its examination of the lowest cost institutional share class for all target date funds through February 2015. This includes 59 target date series, composed of 561 distinct target date funds from 40 different asset managers.
"In the past year, we''ve seen greats shifts in the Target Date Fund markets, including strong asset growth due to a strong equity market, fees continuing to shrink, and the industry overall moving away from a recordkeeper-distribution model," said Brooks Herman, Head of Data & Research at BrightScope. "Most importantly, we''ve witnessed an ongoing acknowledgement by plan sponsors and advisors that defined contribution participants prefer to have their retirement accounts professionally managed, and TDFs continue to be the vehicle of choice to meet this need."
: Fees continue to fall, with the current average fee at .65 percent. Fees are down almost 10 percent since 2011.
: TDF assets account for $700 billion in Investment Act of 1940 funds, a 12 percent increase over last year''s figures.
: This year saw significant movement in target date series, with three exits and six entrances into the market.
: Glidepath''s stability continues, as noted in BrightScope''s last two reports, and equity at the stated target date funds is 41 percent. Equity at the landing point remains at 30 percent, where it has been holding strong since 2012.
: Fund families bringing their glidepath down to its most conservative position at the target date make up 25 of the 59 target date series in the study. To funds accounted for three of the new entrances into the target date market.
: "Through" funds comprised all series leaving the market this year, and only accounted for half of the new series entrances (in 2014, this was 100).
: BrightScope observed a 7 percent decrease in proprietary target date assets since 2010.
One of the most notable shifts we noticed in the TDF market were the changes in distribution model. Previously, record keepers such as Fidelity, Vanguard, and T. Rowe Price maintained their dominance by selling their own TDFs to plan sponsors. However, this model was appears to be changing. More and more, sponsors are looking off-platform to find the best TDFs for employees, and major companies such as iShares (the largest ETFs provider) have walked away from TDFs for lack of a strong distribution mechanism as a result of this trend. BrightScope believes this space will become increasingly competitive in the coming year, bringing even more changes in the overall market.
Note: This data is accurate as of April 22, 2015.
To read more about BrightScope''s observations on TDFs, market entries and exits, and distribution model shifts, visit the BrightScope blog at:
BrightScope obtains an increasing amount of its data directly from plan sponsors and record keepers, and augments these primary sources with data from publicly available sources such as the Department of Labor and the Securities and Exchange Commission. By analyzing and interpreting this data, BrightScope provides unprecedented transparency into the 401k industry.
The BrightScope Rating was developed by BrightScope, Inc. with the help of leading academics and independent 401k fiduciaries. By analyzing more than 200 individual data points, the BrightScope Rating algorithm calculates a single numerical value for each 401k plan. The data points examined cover broad categories such as total plan cost, company generosity and investment menu quality.
BrightScope has rated nearly 50,000 401k and 403b plans, spanning more than 57 million workers and over $3 trillion in assets. Industry adoption of the BrightScope Rating will lead to more cost-effective plans, increased participation rates, higher employee satisfaction and better outcomes for the 60 million employees who depend on their 401k plan for retirement.
BrightScope is a financial information company that brings transparency to opaque markets through independent research and analysis. Delivered through cloud-based software, BrightScope data drives better decision-making for individual investors, corporate plan sponsors, asset managers, broker-dealers, and financial advisors. The BrightScope Rating™, developed in partnership with leading independent 401k fiduciaries, reviews more than 200 unique data inputs per plan and calculates a single numerical score which defines plan quality at the company level. In April 2011, the company launched BrightScope Advisor Pages™, the first comprehensive and publicly available directory of financial advisors designed to help consumers discover information and conduct due diligence on wealth management professionals. BrightScope also markets a suite of data analytics software products to Fortune 1000 companies, asset managers, broker-dealers, financial advisors, and other market participants. Public ratings for nearly 50,000 retirement plans as well as rating definitions, criteria and methodologies, and information on more than 680,000 financial advisors and nearly 33,000 active advisory firms are available for free at .
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Datum: 05.05.2015 - 06:00 Uhr
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