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Institutional Plan Sponsors Investment Decisions
A recent study using a dataset of 80,000 yearly observations of institutional investment product assets, accounts, and returns for 24 years (1984−2007) indicate that that plan sponsors may not be acting in their stakeholders’ best interests when they make rebalancing or reallocation decisions. Investment products that receive contributions subsequently underperform products experiencing withdrawals over one, three, and five years. For investment decisions among equity, fixed-income, and balanced products, most of... -
White House Memo Makes Case for Fiduciary Standards for Brokers Advising 401(k) Plans
If a White House memo from Jason Furman, Chairman of President Obama’s Council of Economic Advisors is any indication, brokers advising 401(k) plans will soon be under a fiduciary standard, which would require them to act in the Plan’s best interest, and not a “suitability” standard, which currently exists. If such a plan were implemented, then revenue sharing or payments received for selling certain funds will no longer be permissible. ... -
Algorithmic Hedge Strategies Outperform Human Managers in 2014
According to an article on CNBC this morning, systematic hedge strategies outperformed their human counterparts in 2014. The best performing category within the segment was managed futures strategies, which gained 15.2% for 2014. Falling oil prices, the climbing U.S. Dollar, and declining U.S. government bond prices were cited as trends that these funds were able to capitalize upon. The entire article can be read here.