In DC plans, fixed income investment options often lack diversity. Expanding fund lineups to include a wider range of fixed income strategies could potentially help investors increase risk-adjusted returns.Read More
Whether a plan sponsor favors active or passive management, choosing a target date manager is an active decision that may have much greater fiduciary considerations than the costs of the underlying funds. The very definition of “passive” is unclear, and the glide path and asset allocation will likely have much greater impact than the potential cost savings on passive funds.
Voya’s third survey of participant preferences in target date funds finds that two-thirds of retirement plan participants prefer target date funds which offer a mix of actively and passively managed components. The survey also confirms earlier findings that participants who use target date funds have greater confidence in their investments than those who don’t. The white paper with the full 2015 results, as well as the two previous surveys conducted in 2011 and 2013, can be found here.
After more than 20 years of persistently declining interest rates, the fixed income investment environment has grown more challenging of late — perhaps as challenging as it has ever been — as the low yields that have dominated the marketplace in recent memory are being supplanted by fears that rates are beginning to move higher.