The Markets August 11, 2008

ETFs Feel Effects of Stock Market Volatility

U.S. exchange-traded fund (ETF) assets totaled approximately $575 billion at the midway point of 2008 – down 5.4% from the start of the year, according to a report from State Street Global Advisors (SSgA).
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The report attributes the drop in assets to declining equity valuations, according to an SSgA new release. Investors continued to add shares of ETFs to their portfolios despite the market decline, as the number of ETF shares outstanding increased 9% during the first half of 2008.

“Many of the trends highlighted in the 2008 Mid-Year Exchange Traded Fund Report, including the strong growth of sector, fixed income, inverse, and commodity ETFs, illustrate how ETFs are helping to level the playing field by improving access to segments of the market that were once beyond the reach of most investors,” said Tom Anderson, head of strategy and research for State Street’s Intermediary Business Group and author of the report, in the news release.

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However, the trends report shows that ETFs are feeling the effects of stock market volatility. The pace at which new ETFs are entering the market has slowed – 87 new ETFs were launched in the first half of 2008, compared with 167 during the same period in 2007.

In addition, investors are moving to more conservative choices. In the first half of 2008, assets in Treasury Inflation Protected Securities (TIPS) ETFs and commodity ETFs have increased 39% and 34%, respectively.

A free copy of the 2008 Mid-Year Exchange Traded Fund Report can be downloaded from www.spdru.com.

Products August 11, 2008

MassMutual Reports Success with Wireless Enrollment Product

MassMutual's handheld e4 technology has delivered an average on-site enrollment rate of 92% among those who previously were not contributing.
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Since its introduction in 2005, MassMutual’s e4—which stands for Electronic Enhanced Enrollment Experience—technology has delivered an average on-site enrollment rate of 90%, but the most recent data indicates that number has climbed even higher.

The e4 system allows participants to use hand-held Pocket PCs with their personal information to simulate the experience of enrolling on the Web. MassMutual’s communication specialists can then use the information to customize their instructions to plan participants (see MassMutual to Release Wireless Enrollment Product).

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According to a MassMutual press release, among participants who were not contributing prior to an e4 meeting, 92% now enroll during the meeting at an initial average contribution rate of 5.3%. “If individuals aren’t participating, e4 is highly successful in engaging them to do so because it’s easy and fun,” said Ian Sheridan, corporate vice president and chief marketing officer for MassMutual’s Retirement Services Division, in the release.

Enhancements to the original e4 system include the option to elect a Roth contribution, compatibility with both 401(k) and nonprofit plans, and the ability for participants to elect any target retirement date investment option offered by the plan. MassMutual said it has also started a pilot that leverages the e4 technology to deliver the experience on devices such as cell phones and other personal digital assistants (PDAs).

More information is available at www.massmutual.com/retire or 888-626-4911.

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