Products January 21, 2016

Investment Product and Service Launches

Putnam reveals ‘Maneuver in Markets’ program for advisers; Vanguard reopens money market fund ahead of SEC changes; Wells Fargo offers enhanced pension metrics reporting.
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Putnam Reveals ‘Maneuver in Markets’ Program

Putnam Investments is launching a multi-faceted program to help advisers and their clients “navigate some of the most vexing challenges of today’s financial markets,” especially as investors confront low interest rates, highly volatile markets and geopolitical instability.

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Described as a “broad-based Putnam informational campaign,” the program is “designed to provide the adviser community with an ongoing stream of timely observations and perspectives to create deeper understanding of the rapidly changing market environment.” Advisers participating in the program will also gain insights about potential investment strategies that can help clients achieve their key financial goals, despite prevailing headwinds. 

“In recognizing that meticulous investment research and flexible management strategies are crucial to helping investors ‘maneuver in markets,’ we will be bringing a new dimension to our dialogue with the marketplace this year,” explains Bob Reynolds, president and CEO of Putnam Investments. “As a firm that has spent years piloting investors through virtually every type of investment climate, we are committing the full force of our resources and best thinking to help advisers steer their clients through these times.”

Putnam says the program will largely center around four key challenges facing investors today. These include navigating interest rates and addressing client challenges with active rate strategies; expanding short-term choices and preserving client options and capital; diversifying portfolios to reduce risk and manage volatility; and pursuing greater returns and performance potential amid more sluggish markets.

As the program rolls out advisers can expect “frequent delivery of robust content” through a host of different vehicles, including regular updates on www.putnam.com, thematic video commentary from portfolio managers, investment webinars, expert white papers on a range of topics, social media, and digital and print advertising.

NEXT: Vanguard reopens Treasury MMF

Vanguard Reopens Treasury Money Market Fund  

Vanguard has reopened the Vanguard Treasury Money Market Fund to all investors.

The firm closed the $9.1 billion fund in January 2009 to “protect existing clients from high levels of cash flow that could potentially dilute the fund’s yield.” Market conditions have since improved, the firm says, and the fund’s board determined that it would be in the best interests of shareholders to reopen the fund.

Vanguard investors will now have access to two low-cost U.S. government money market funds, the firm explains, after it announced in June that it was reopening its $4.8 billion Federal Money Market Fund to all investors.

The Treasury Money Market Fund invests primarily in U.S. Treasuries, while the Federal Money Market Fund invests primarily in U.S. agency debt. As U.S. government money market funds, both funds provide investors with a stable $1 net asset value (NAV). Moreover, they will not be subject to new liquidity fee or redemption gate requirements under rules adopted by the Securities and Exchange Commission (SEC) in 2014 (taking effect later this year). 

NEXT: Wells Fargo offers enhanced pension metrics reporting

Wells Fargo Institutional Retirement and Trust is offering enhanced reporting capabilities that will connect its defined benefit discretionary asset management clients to a new pension metrics system, offering daily portfolio monitoring and management of a pension plan’s dynamic glide path.

This will give investment managers the opportunity to help handle portfolio shifts on a daily basis when certain financial market trigger dynamics are met.

Traditionally, providers generate a paper-bound asset and liability study for clients as the key outcome of asset/liability analysis process. The pension metrics system will give Wells Fargo Institutional Retirement and Trust the flexibility to offer clients live modeling updates by changing assumptions and other factors, generating a living document that matches today’s volatile investment climate.

“The ability to know the funded status of our clients’ plans on a daily basis will be ever more important as we move into a rising interest rate environment,” says Tom Hooley, managing director of Institutional Asset Advisors at Wells Fargo Institutional Retirement and Trust. “As rates rise, we will be able to immediately see the impact on our clients’ plans and make the necessary change to investment strategies.”

Portfolio managers will be able to walk sponsors through a dashboard of assets, liabilities, funded status and potential risk measures, as well as model interest rate and portfolio sensitivities and provide what-if scenario analysis of portfolio changes. Multi-year monitoring and forecasting trends and variation in funded status, accounting expense, contributions and balance sheet impact will also be part of the enhanced pension reporting.

Other key benefits, according to Wells Fargo, include:

  • Increased efficiency and productivity, freeing up more time for consultation;
  • On-demand desktop analysis, allowing for more  sophisticated investment discussions with clients;
  • Greater volume of data, leading to more informed decisions and better results; and
  • Timely advantages in light of interest rate volatility environment expected in future quarters.
Data & Research January 21, 2016

Some Boomers and Retirees Are Optimistic on Finances

More affluent Baby Boomers and current retirees say they have less trouble sticking to a long-term investment strategy to fund their golden years.
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A new survey from American Funds finds a broadly optimistic outlook among more affluent Baby Boomers and retired investors—despite widespread reporting about Americans’ lack of retirement savings.

These groups plan to remain invested in equities to generate adequate income to live on, American Funds says in a report exploring the survey, “The Wisdom of Experience: Lessons from Boomers and Retied Investors.” The purpose of the study was “to probe investment objectives, as well as awareness and attitudes toward specific topics such as volatility, downside protection and fund selection criteria.” It was also designed to elicit investor attitudes around the emotional and lifestyle impacts of retirement.

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A majority, 86%, expect their savings to generate income and even grow in retirement, according to the survey of 1,035 Americans adults age 50 and older with at least $100,000 in investable assets. More than two-thirds, 69%, say they do not alter their portfolios when the market fluctuates, and 64% say sticking with their investment strategy makes them feel smarter as an investor. A full three quarters, 75%, plan to stay invested in equities, and 74% believe the right mutual funds can outpace the market and do better than average. Seventy-two percent say mutual funds with objectives such as growth and income, lower volatility and low fees can help people live better in their retirement years.

NEXT: Advice to younger generations

While 31% of surveyed investors began saving for retirement before the age of 25, and 42% started after the age of 30, higher percentages would advise the next generation to start at an early age, with 64% suggesting that their children and grandchildren start before the age of 25. Only 10% say they should start after the age of 30.

The surveyed investors are also cognizant of the importance of downside protection, with 80% citing that as a key priority. However, only 53% are aware that index funds expose investors to the full ups and downs of the market, and only 36% understand that index funds, with full market exposure, may actually be riskier for those with a shorter investment horizon.

“We wanted to understand what makes investors who are closer to or in retirement feel smarter about investing and how they define a purposeful next chapter,” says Pete Thatch, senior vice president and director of wealth management at American Funds. “While everyone has a different aspiration for retirement, the survey uncovered a certain wisdom of experience in Boomers and retired investors’ investment approaches—and key lessons and insights for younger generations.” That said, the survey also revealed that advisers and sponsors need to educate investors more about “protecting against the downside,” Thatch adds.

NEXT: Working Boomers less confident

Bearing out the results of many other investor surveys, American Funds discovered that Boomers still in the workforce are not as confident as retirees. For example, only half of non-retirees (51%) expect to have more retirement income than their parents, compared to 70% of retirees, and 29% of working Boomers expect to continue to work part-time to fund a semi-retirement.

Furthermore, 49% of retired investors left the workforce earlier than their parents, but only 25% of working Boomers expect to do so.

Overall, however, American Funds says that the investors surveyed “are an optimistic bunch. A majority are or expect to feel satisfied or relaxed in retirement. Very few expressed negative feelings about their retirement, with no more than one in 20 expressing feelings of dissatisfaction, boredom or regret. Interestingly, the optimism felt by these respondents remained consistent across gender, age and asset level. Whether they have $100,000 or $5 million of investable assets, these investors expect to feel satisfied or relaxed in retirement.”

American Funds’ full “Wisdom of Experience” report can be downloaded here.

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