The $650 million Cambridge (Mass.) Retirement System is searching for a new executive director to start in February, confirmed Executive Director Anne Leduc, who will retire May 31. The plan is looking for a candidate with at least five years of government experience, Ms. Leduc said. Potential candidates should submit a resume and cover letter to Brad Tenney, chairman of the board of trustees, or to Ms. Leduc at [email protected]
NEWS BRIEFS: Mass. Plan seeks chief
Fortis Investment Management will acquire a 70% stake in Cadogan Management. Terms were not disclosed. The two firms will combine their hedge fund-of-funds businesses into one, operating under the Cadogan name, said William Braman, U.S. CEO of Fortis. Cadogan's senior managers will remain in their current positions and will be significant shareholders.
Reynolds American contributed $312 million to its pension plans during the first nine months of 2006, according to a company filing. The amount is $81 million more than the company announced at the end of last year; the increase is "part of a strategy to more fully fund the pension obligations in anticipation of the provisions of the Pension Protection Act of 2006," according to the filing. The company also expects to contribute about $290 million to its pension plans in 2007. Reynolds American had roughly $4.4 billion in defined benefit assets as of Sept. 30, 3005, according to Pensions & Investments data.
The British Accounting Standards Board will amend pension accounting rule Financial Reporting Standard 17 to align certain disclosures and valuations with those of International Accounting Standard 19, according to a news release from the ASB. The agency plans to publish the amendment to FRS 17 in December and make the new rule effective for accounting periods ended after April 5, 2007, "although early adoption is encouraged," the release said.
The ASB is making the changes to help accounting statement users better evaluate the financial effects of changes in pension schemes, David Loweth, acting technical director and secretary, said in an interview.
The amendment will require, among major changes, disclosure of principal actuarial assumptions such as mortality rates, Mr. Loweth said. "That has become a big issue in U.K.," he said. "Analysts and investors have found it difficult to determine what impact a change in longevity would have on the liabilities you are showing" for a pension scheme, he added.
Also, the amendment will require the use of the current bid price for quoted securities to determine fair market value, rather than the midmarket value now used.
"Most of the major pension schemes in the U.K. already report on IAS 19 basis, under terms of (EU) regulation," although their U.K. subsidiaries might still be using FRS 17, Mr. Loweth said.
GAMCO Investors plans to add fixed-income capabilities to its largely equity-based investment operation, confirmed Mario Gabelli, chairman, CEO and CIO of value investments. The firm, which managed $26.8 billion in assets as of June 30, had just $918 million in fixed income, and Mr. Gabelli said he plans to bring on a number of new people to expand this practice. Specifically, the firm is in the process of recruiting several investment teams, including a municipal bond team, as part of its strategy to "migrate" toward fixed income over time, said Mr. Gabelli.
The firm also hired Wayne Plewniak as a managing director in GAMCO's fixed-income unit. Mr. Plewniak was a managing director and senior portfolio manager at Lehman Brothers before leaving the firm at the end of last year.
AEGON entered into an agreement with Polish insurer Ergo Hestia to purchase the $841 million pension fund management company PTE Ergo Hestia, according to an AEGON news release. The company will be renamed PTE AEGON Poland. The deal, which is expected to be completed in early 2007, must first be approved by the Polish Financial Supervision Commission.
The acquisition is designed to strengthen AEGON's overall presence in the Polish financial services market, according to the news release.
Vanguard Group reopened the Windsor II, Wellington and Strategic Equity funds, said spokesman John Demming. Vanguard Windsor II, whose six subadvisers managed a combined $45 billion when it closed, reopened with $46 billion. The balanced Wellington Fund, which closed at $41.6 billion, reopened with $44 billion. The active quantitative midcap blend Strategic Equity Fund, which closed at $7.2 billion, reopened with $7 billion, while the minimum initial investment was raised to $10,000 from $3,000.
The funds were closed to new investments in April to moderate inflows after a period of strong performance. "The measures we put in place to moderate cash flow and protect investors have been successful. ... After careful consideration, we feel comfortable removing the restrictions," Vanguard CEO John J. Brennan said in a news release.
Robert Gates, President Bush's nominee for secretary of defense, is expected to leave his position as "lead independent trustee" on the board of Fidelity Investments' mutual funds. "We expect (Mr. Gates) will be leaving the board as a result of his appointment as secretary of defense," said Fidelity spokesman Vin Loporchio. If and when that happens, the board's independent trustees will choose a replacement, Mr. Loporchio said.
BATON ROUGE, La. — The Firefighters Retirement System of Louisiana is considering investing in cash overlay strategies, confirmed Kelli Chandler, administrator and controller of the $970 million fund. Plan officials have invited cash overlay manager Clifton Group Investment Management to make a presentation this month and will likely invite other cash overlay managers to make presentations in coming months. No decisions have been made concerning searches or asset allocation changes. Consulting Services Group is assisting.
MADISON, N.J. — Wyeth contributed $161.4 million to its pension plans through the first nine months of this year, according to a company filing with the Securities and Exchange Commission. Wyeth officials expect to contribute about $9 million more to the plans, which have total assets of $4 billion, before year's end.
RALEIGH, N.C. — The North Carolina Retirement Systems divested about $24 million in stock of nine companies that have monetary or military ties to the Sudanese government, confirmed Sara Lang, a spokeswoman for State Treasurer Richard Moore. The companies are Bharat Heavy Electricals, China Petroleum and Chemical Corp., Nam Fatt, Oil & Natural Gas Co., PECD Berhad, PetroChina Co., Sudan Telecom Co., Tatneft OAO and Videocon Industries Ltd. The $70 billion fund will continue to do its own research and work with other states and pension funds to identify other companies supporting the Sudanese government, according to a news release from the treasurer's office.
ARMONK, N.Y. — International Business Machines Corp. will see its stockholders' equity reduced by between $10 billion and $11 billion by Dec. 31 as a result of FASB's new pension accounting standard, according to a 10-Q filing. The standard requires companies to put the funded status of their pension and other postretirement benefit plans on the balance sheet. The company's total stockholders' equity was $34.2 billion as of Sept. 30. The company contributed $1.68 billion to its non-U.S. plans for the first nine months of this year and plans to contribute $1.7 billion to $2 billion total for 2006. The plan had roughly $48.5 billion in pension assets and $46.4 billion in liabilities as of Dec. 31, 2005, according to an SEC filing.
MIRAMICHI, New Brunswick — UPM-Kymmene Miramichi Inc. Pension Plan Master Trust named Goldman Sachs Asset Management, FX Concepts, Mellon Capital Management and ABN AMRO Asset Management as finalists in its search for a manager to run a currency overlay on US$65 million of international equities for the paper company's US$220 million Canadian pension fund, confirmed Donald Pearson, vice president of finance for parent UPM-Kymmene North America, Westmont, Ill. Fund officials are adding the overlay, which will primarily be on U.S. equities, to help boost returns and lower risk, Mr. Pearson said. Plan officials issued an RFP during the second quarter with Mercer Investment Consulting assisting. They hope to choose a firm by the end of the year. Mr. Pearson was promoted in early summer to vice president of finance, replacing Diane Weber, who retired in June. He reports to CEO Bernd Eikens. Mr. Pearson was comptroller of UPM-Kymmene North America, a subsidiary of UPM-Kymmene, Helsinki, Finland. Company officials have not yet chosen a replacement.
NEW YORK — Bonuses in the asset management industry are expected to be 5% to 15% greater this year, according to a new report on compensation from Johnson Associates, a compensation consulting firm. The increase has been fueled by both market appreciation and net inflows at many asset management companies over the past year, said Andrew Roost, vice president at Johnson Associates. Employees at firms with equity strategies and alternative investments, particularly hedge funds, will likely see the greatest increases, said Mr. Roost. These firms are expected to pay bonuses that are 10% to 15% greater than last year, while fixed-income firms will likely issue bonuses 5% to 8% greater, according to the report.
NEW YORK — Compensation for CEOs and CFOs of real estate investment trusts rose at twice the rate for other corporate executives in 2005, according to a joint study by executive compensation consultants Steven Hall & Partners and Equinox Partners, an executive search firmry.
Median total CEO compensation in 117 public REITs grew by 24% to $1.92 million in 2005, compared to 10% among CEOs at Fortune 1000 companies. Median CFO compensation increased 32% to $943,722, compared to Fortune 1000 CFO compensation of 9.7% in 2005.
LONDON — U.K. plan sponsors expect to inject up to £75 billion ($142.45 billion) into their pension plans over the next 10 years, according to research issued Oct. 31 by Mercer Human Resource Consulting. Plan sponsors expect to increase their funding targets by an average of 10%, according to analysis of data from 160 of the firm's clients, said Tim Keogh, worldwide partner at the firm. The average funding target is likely to increase over the next 10 years to 100% of liabilities under FRS 17 and International Accounting Standards, from 92% currently. Most pension executives plan to fund their deficits within 10 years. The increased funding targets are being driven by new U.K. legislation that increases the responsibilities of scheme trustees over plan funding, added Mr. Keogh.
PITTSBURGH — The average funded status of U.S. corporate pension plans improved in October, with liabilities climbing an average 1%, compared with 1.7% in September, and the average value of plan assets increasing an average of 2.5%, compared with a September increase of 1.5%, according to the Mellon Pension Liability indexes. Double-digit equity returns year-to-date Oct. 31 and interest rate hikes during the first five months of the year improved the funded status of the average plan by 7.8% for the first 10 months of the year, according to a Mellon news release. The assets of an average plan increased 9.3% as of Oct. 31 over Jan. 1, while liabilities were 1.5% higher. The Mellon Pension Liability indexes are a set of benchmarks that uses current discount rates to measure the performance of liabilities.
HEERLEN, Netherlands — John Neervens, chairman of the board of directors at the €168 billion ($214 billion) Stichting Pensioenfonds ABP, Heerlen, died Nov. 2 following a serious illness, spokesman Hans ten Brinke confirmed. He was 60. "His savvy and inspiring leadership has guided the privatization of ABP and reformed it to be a modern and professionally organized company," Mr. ten Brinke said in an e-mail response. As chairman for the past 12 years, Mr. Neervens also won loyalty from co-workers due to his focus on "the human factor" behind business-related decisions, Mr. ten Brinke added. A replacement has not been named. Information on funeral services was not made public.
SPRINGFIELD, Ill. — The Illinois Teachers' Retirement System improved its funded status to 62% as of June 30, up from 60.8% the prior year, according to a fiscal year-end actuarial report from Buck Consultants. The $36.5 billion fund returned 12.2% gross of fees for the year, beating its 11.3% benchmark, according to a news release. Jon Bauman, executive director, said in the release that the improvement in the funded ratio came from investment returns despite a $524 million reduction in pension contributions from the state. The board also put two firms on its watch list, an automatic action following two consecutive quarters of underperformance on a rolling three-year basis, said Eva Goltermann, public information officer. They are Mazama Capital Management, for $113 million invested in active domestic small-cap growth equities, and Payden & Rygel, for $659 million invested in core-plus fixed income. The following firms remained on the watch list for performance: Byram Capital Management, for $203 million invested in active domestic small-cap value equities; Delaware Investments, for $348 million invested in active domestic small-cap growth equities; INVESCO, for $1 billion invested in active international equities; LSV Asset Management, for $717 million managed in active domestic small-cap to midcap value; and PIMCO, for $986 million invested in a domestic enhanced equity index portfolio. Pyramis Global Advisors, which managed $1 billion in active international equities for the fund as of June 30, was placed on the watch list because of organizational reasons. Harris Associates remained on the watch list for organizational reasons connected with the management of $496 million in active international equities for the fund. The following firms were taken off the watch list after organizational concerns were resolved: BlackRock, for $1.3 billion invested in core-plus fixed income, and Boston Partners, which managed $910 million in active domestic large-cap value equities. Jarislowsky Fraser was removed from the watch list after performance improved for $495 million invested in active international equities. The board also voted to change its practices regarding securities class-action litigation. Investor Responsibility Support Services, an independent research and analysis firm, was hired to work with TRS staff to identify potential securities class-action suits and to determine whether the system should file as lead plaintiff, according to a news release about the November meeting. "This approach will allow TRS to focus on potential litigation that is likely to result in recoveries," the release said. Previously, TRS relied on a "preferred provider" list of securities class-action litigators authorized to monitor the TRS portfolio and identify cases where TRS might be interested in becoming lead plaintiff. The law firms were not paid for their services, nor were they guaranteed future legal work. Trustees voted to terminate the preferred provider list.
LONDON — The U.K. Pension Protection Fund's deficit will likely lead to increased payments for U.K. pension plans, confirmed Mercer Human Resource Consulting spokeswoman Jackie Barber. The U.K.'s pension insurance fund has £1.88 billion ($357.1 billion) in assets and £2.43 billion in liabilities, according to its annual report, released Nov. 7. The shortfall is mitigated in part by £138 million in levies collected between April 2005 and March 2006. "Levy rises are inevitable as the real cost of the fund emerges," according to a news release from Mercer. However, "there's a big undershoot here that can't go uncorrected," Tim Keogh, worldwide partner, said in the release. "If there is a shortfall during times of few corporate insolvencies, the levy must be unsustainably low." "We indicated last year that we expected deficits in the early years of the fund's life," PPF Chairman Lawrence Churchill said in a news release. "We have and will continue to have sufficient assets available to meet compensation payments as they fall due, and we aim to raise our solvency level of 86% funded as the organization and the fund mature."
CINCINNATI — A gap exists between the amount of money people think they need for retirement and where they expect to get that money, according to a survey of 1,000 workers by the Retirement Corp. of America between Sept. 29 and Oct. 1. Roughly 23% of Americans plan to rely heavily on Social Security and 20% on pension benefits after they retire. Roughly 31% expect to use their personal savings, mutual funds or IRAs as their primary source of retirement income, and 12% hope to earn additional income from part-time work after retiring. "Increased life expectancy has driven many to work for a longer period of time, offering a greater chance of achieving financial retirement targets," said Daniel Kiley, chairman and chief compliance officer of the Retirement Corp. of America, a money management firm. "However, as traditional sources of retirement income such as company pensions and Social Security dwindle with each passing day, more Americans will have to take charge of their finances and begin planning and investing to generate alternate streams of income."
NEW YORK — Mercer Investment Consulting is offering a new transition consulting service through Sentinel Group, its custody and transition management unit. The new service will help institutional investors establish panels of pre-approved transition managers for transactions of more than $50 million. "A transition can be the largest one-off operational cost to which investors will be exposed, and the risks can be quite significant," Stacy Scapino, global leader of the Mercer Sentinel Group, said in a news release. "Transition oversight requires considerable experience, expertise and knowledge to ensure a controlled and cost-effective implementation and to avoid erosion of alpha."
SAN FRANCISCO — Barclays PLC plans to acquire ETF provider INDEXCHANGE Investment from Bayerische Hypo-und Vereinsbank for about €240 million ($307 million) in cash, according to a news release. INDEXCHANGE will be merged into Barclays Global Investors' iShares ETF business. The transaction is expected to close within three months, following regulatory approvals. "The combined business will create a powerful force to accelerate the development of ETFs in Europe," Bob Diamond, BGI chairman and president of Barclays, said in a news release. "It is our intention to continue to expand BGI's franchise across Europe and Asia, and this is an important step in the evolution of our strategy." INDEXCHANGE had €15.2 billion in assets in 79 funds as of Nov. 1. BGI has 38 iShares listed on local exchanges in seven European countries, representing €15.4 billion as of Nov. 1, said Lance Berg, BGI spokesman.
NEW YORK — Dow Jones Indexes introduced its Dow Jones Canada Select Growth index and Dow Jones Canada Select Value index, according to a news release. Barclays Global Investors Canada has two new exchange-traded funds based on the indexes; the ETFs were expected to start trading Nov. 10 on the Toronto Stock Exchange. The Dow Jones Canada Select Style Indexes measure the performance of large-cap and midcap stocks listed on the Toronto Stock Exchange that exhibit either growth or value style characteristics. They are designed as broad benchmarks for domestic use. The indexes will include Canadian income trusts, which allow for only 49% of shares to be held by non-Canadian investors.
WASHINGTON — Mutual fund assets worldwide totaled $19.41 trillion as of June 30, up 1.6% from the first quarter and up 19% from the year before, according to the Investment Company Institute. Net inflows for mutual funds worldwide came to $206 billion in the second quarter, down 53% from the prior quarter but up 24% from the year-earlier quarter. With U.S. benchmark equity indexes declining during the second quarter, equity flows worldwide amounted to $73 billion, tumbling 70% from the prior quarter. Of that total, flows into equity funds in the Asia/Pacific and African regions accounted for $41 billion, with flows into the Americas and Europe at $32 billion. Bond funds worldwide saw a $5 billion outflow in the second quarter, compared with a $65 billion inflow for the first quarter. Money market funds saw inflows accelerate to $71 billion, up from $28 billion in the first quarter.
TACOMA, Wash. — Russell Investment Group changed the asset allocations of its LifePoints Target Date Funds based on its research that typical defined contribution participants can benefit from more aggressive asset allocations in the early years of saving and investing for retirement, according to a news release. Russell modified its 2020 Strategy Fund to 64% stocks/36% fixed income, from 55% stocks/45% fixed income; the 2030 Strategy Fund to 95% stocks/5% fixed income, from 64% stocks/36% fixed income; and the 2040 Strategy Fund to 100% stocks, from 72% stocks/28% fixed income.
CHICAGO — Northern Trust Global Investments will offer an index fund tracking the Domini 400 Social index, which screens stocks for environmental, social and governance factors. The NTGI Socially Responsible Large Cap Equity Index Strategy begins with $20 million from clients and will be offered as a commingled fund, John O'Connell, Northern Trust vice president and director-institutional public relations for the Americas, said in an interview. NTGI will use a proprietary quantitative investment process to optimize performance in tracking the index, according to an NTGI statement. The Domini 400 Social index screens companies for gambling, nuclear power, military weapons, alcohol, tobacco and firearms, and favors for inclusion companies with exemplary records in human rights, employee relations, diversity, community relations, corporate governance, environmental management and product quality. The screening is overseen by KLD Research & Analytics. NTGI already manages $20 billion in socially responsible funds, in both passive and active strategies, including about $8 billion in Sudan-free index funds and customized separate accounts, Mr. O'Connell said.
NEW YORK — S&P 500 companies' aggregate operating earnings for the third quarter gained 19.9% from the comparable third quarter in 2005, marking an unprecedented 18th consecutive quarter of double-digit operating gains for the index, based on year-over-year comparisons, according to a news release from Standard & Poor's Index Services. The gains for the third quarter were broad, with seven of the 10 business sectors within the S&P 500 posting double-digit increases in operating earnings, he said. By contrast, the energy sector dominated S&P 500 operating earnings in the second quarter. S&P projects a 9% gain in year-over-year operating earnings for the fourth quarter, Howard Silverblatt, S&P senior index analyst, said in an interview. The previous record for consecutive year-over-year quarterly double-digit gains was 13 quarters ended Dec. 31, 1995, Mr. Silverblatt said, citing statistics dating to 1936.
NEW YORK — John Siciliano, president and CEO of BKF Asset Management, will receive a severance payment of $950,000 upon his resignation from the firm at the beginning of 2007, according to an SEC filing. In addition, if BKF executes a "change of control event" before the end of 2007, Mr. Siciliano will receive another cash payment of $700,000. BKF has liquidated its assets under management as it explores strategic options within the investment management industry. Mr. Siciliano earlier agreed to step down from his post at year's end. He will provide consulting services to the company between January 2007 and July 2007, for which he will receive a one-time cash payment of $300,000, according to the filing.
NEW YORK — International Securities Exchange Holdings filed a complaint in U.S. District Court in New York, seeking a declaratory judgment to allow it to list options based on the Dow Jones industrial average and S&P 500 index. ISE claims it does not need licenses from Dow Jones and S&P parent McGraw-Hill to list the options, as Dow Jones and McGraw-Hill have claimed. "ISE wished to list DJX and SPX options for trading. However, ISE was informed by Dow that (Dow and McGraw-Hill) would not grant a license," according to the complaint. "Dow has asserted in public statements that it is ‘committed to defending its intellectual property rights with respect to use of its indexes in the creation of financial instruments,' by which it clearly means that it will sue" ISE. A judge for the case has not yet been assigned, according to court documents. David Guarino, S&P spokesman, said, "ISE's legal position lacks merit and is based on assertions that run counter to 25 years of well-established legal and marketplace precedent recognizing the rights of index providers." Dow Jones spokesman Howard Hoffman was not immediately available for comment.
NEW YORK — AIG Global Investment Group joined the Investor Network on Climate Risk, a group of 50 institutional investors with a combined $4 trillion in assets under management that focuses on the investment risk and opportunities of climate change, confirmed Jeannine Lewan, an AIG Global spokeswoman. "AIG Global Investment Group believes that, as an investor, we must actively manage the risks and opportunities related to environmental, social and ethical trends," Win Neuger, chairman and CEO, said in a statement. "An alignment of interests between ourselves, our clients and the world around us enables us to achieve strong investment returns and enhance our own profitability, while also trying to keep our environment intact." "AIG Global Investment Group's decision to join INCR is a telling sign of growing investor concern about climate change and its far-reaching consequences for businesses and investors," Mindy S. Lubber, director of INCR and president of Ceres — which helps oversee INCR activities — said in a statement.
NEW YORK — Only 28% of financial services firm boards have approved succession plans for executive management, according to a PricewaterhouseCoopers survey of officials at 183 U.S. financial services firms. Only 58% have discussed succession planning, although 61% see such planning as a priority. Separately, 76% either "strongly agree" or "agree" that derivatives will be the next area of regulatory focus for the financial services industry. Some 97% of board members said due diligence and understanding of derivatives should be a major concern for boards. Other concerns include managing performance expectations, with 22% "highly concerned" and 65% "concerned," and pressure on fees, with 25% "highly concerned" and 53% "concerned." PwC surveyed corporate internal audit executives and members of companies' administration, audit committees and boards of directors. The survey was conducted in October.
TOKYO — Nomura Holdings will acquire global agency broker Instinet from private equity firm Silver Lake Partners, according to an Instinet news release. Terms were not disclosed. The deal is subject to regulatory approvals and is expected to go through in the first quarter of 2007. Instinet will be operated as a wholly owned subsidiary, and senior management, including CEO Edward J. Nicoll, will continue to run the firm. said Hiromasa Yamazaki, senior managing director of Nomura Securities. "The firms complement each other remarkably well, and we fully expect both of our client bases to benefit greatly," said Mr. Yamazaki.
MINNEAPOLIS — CalPERS wants to prevent departing UnitedHealth CEO William McGuire from obtaining a $1.1 billion retirement package. A motion filed in U.S. District Court in Minneapolis by the $221.3 billion California Public Employees' Retirement System, Sacramento, claimed Mr. McGuire could cash in nearly $1 billion from mispriced stock-option grants stemming from his 1999 employment contract. In addition, Mr. McGuire is eligible to receive a lump-sum pension payment of $6.4 million plus $5.1 million a year for life, the motion said. Mr. McGuire, who stepped down as the company's chairman on Oct. 15, will quit as CEO, following a review by outside counsel into alleged backdating practices the company used in pricing stock options. The motion also seeks to prevent Mr. McGuire from exercising any United Health stock options without court approval and to restrict proceeds of sales of UnitedHealth stock he acquired by exercising stock-option grants, including freezing a $135 million gain he obtained from a Feb. 23 sale. CalPERS is the lead plaintiff in a class-action lawsuit challenging UnitedHealth's stock-options practices. Mr. McGuire's attorney, David Brodsky, a partner in the law firm of Latham & Watkins, did not respond to requests for comment. An Oct. 15 statement from UnitedHealth said Mr. McGuire had voluntarily agreed to reprice all options awarded to him from 1994 through 2002 to the annual high share price for each year.
WASHINGTON — An EBRI study found that 57% of women and 53.7% of men participated in employer-based defined benefit and defined contribution plans in 2005, down by about two percentage points each from 2004. Fifty-eight percent of all employees ages 21-64 worked for employers or unions that sponsored retirement plans in 2005, according to the Employee Benefit Research Institute study. Of those, almost half — 47% — participated in retirement plans in 2005, down from 48.3% a year earlier. And 55% of all full-time workers participated in retirement plans in 2005, down from almost 57% a year earlier. EBRI used 2005 U.S. Census Bureau data for the study.
Risk analytics tool developer Axioma offers new model NEW YORK — Axioma, a developer of risk analytics tools, launched a new risk model for the U.S. equity market. The model builds on the risk model and performance attribution components of Goldman Sachs Asset Management's portfolio analytics, which Axioma acquired last year. Axioma officials claim the new model is more transparent than other approaches, incorporates a factor that is dependent on a client's portfolio and investment strategy, and includes daily risk estimates, while most other models revise risk on a monthly basis.
WASHINGTON — Watson Wyatt Worldwide recommended that more than 90% of the U.S.-based defined benefit plan clients for which it provides asset-allocation advice include liability-driven investment strategies in their plans over the past year to better hedge pension liabilities, according to a news release from the consulting firm. U.S. pension plans are increasingly shifting to LDI strategies to reduce potential volatility spurred by shifts in accounting regulations and the newly enhanced funding requirements in the recently enacted Pension Protection Act of 2006. "Higher funding targets, restrictions on smoothing and requirements for valuing pension assets and liabilities at a market basis are prompting companies to look for more predictable returns through liability-driven investing," said Mark Ruloff, director of asset allocation, in the release.
MALVERN, Pa. — The Vanguard Group introduced the Vanguard Structured Large-Cap Value Fund, which will be added to the company's existing lineup of three structured equity portfolios offered to institutional investors, confirmed spokeswoman Melissa Nigro. Vanguard filed a registration statement with the SEC for the fund, which will seek to outperform the Russell 1000 Value index. It will be managed by the firm's Quantitative Equity Group, according to a Vanguard news release. The new strategy will offer two share classes: institutional shares, with an expense ratio of 0.25% for investment minimums of $5 million; and institutional-plus shares, with an expense ratio of 0.15% for investment minimums of $200 million.
WASHINGTON — About 48% of U.S. households owned mutual funds, the highest level of ownership since 2001, when the level was 52%, according to a survey released Nov. 1 by the Investment Company.