Last week, I was fortunate to get to launch a major educational campaign with Governor Terry Branstad in the state of Iowa. While the specifics on the campaign are not important to most of you, you will most likely find what led up to it interesting. Read more
I’d like to thank you for indulging me as I take one last dramatic turn in my blog series featuring the “Seven Administrative Sins.” In each blog, I’ve uncovered the errors 403(b) plan sponsors make (many times unknowingly) that can doom their plans – either from a compliance perspective or through administrative adversity.
To get up to speed, you can read the first blog of this series, where I talked about how problems arise when many plans have provisions to force out small amounts, as well as the limitations regarding retirement plan loan limitations. In the second blog, I introduced two more “sins” – hardship distributions and Qualified Domestic Relations Orders (QDROs).
At the Principal Financial Group®, we typically see these type of problems crop up when a 403(b) plan sponsor who is shopping for a new service provider comes to us in search of a professional to guide them. Which brings me to the last chapter – the final three (and possibly the most pervasive) sins a plan sponsor can make. Read more
Our research* shows that since 2008, European investors increasingly favour real assets, such as infrastructure and property. Before then it was mainly the preserve of large Australian and Canadian funds.
The search for yield and safe havens has created new patterns in investor behaviour, and these have grown stronger since.
Investors now recognise the value of real assets as vehicles generating real returns. Historically many investors shied away from such assets because of their lack of liquidity. However, the demand for yield is such that they are prepared to forego liquidity on larger parts of their portfolio to meet their investment targets, whether they are seeking return or inflation protection. As a result, institutional demand for infrastructure and utilities is on the rise. Read more
The use of the term duration has successfully been adopted by the high yield investment universe over the past few of years. Why? Because all else being equal, lower duration means lower interest-rate risk. And the number-one concern for fixed income investors over the past several years has been a fear of when interest rates will begin their rise to normal levels. In fixed income, if rates rise, the value of your bonds declines. And the longer your duration, the more pronounced your decline, again with the caveat all else being equal. The common way to explain duration is that it measures the sensitivity of the price of a bond to a change in interest rates and is expressed as a number of years. This is an extremely useful way to compare two fixed income investments where all else is equal. We have noticed that in a reach for yield, investors have invested in short duration high yield as a way to both gain the higher yield available in the high yield market while seemingly reducing risk by having a shorter duration portfolio. Read more