Products October 27, 2009

J.P. Morgan Takes Target Date Compass Online

J.P. Morgan Funds has launched an online version of its target-date evaluation program, the Target Date Compass.

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According to a company news release, the program provides a framework advisers can use to evaluate design factors, such as time horizon, participant behavior, risk management, and asset class diversification, and identify those target-date strategies that are most closely aligned with the goals of the plan sponsor and its participants (see “JPMorgan Announces Target-Date Evaluation Product”).

Advisers can now go online and customize the Compass by adding or removing funds from the target-date universe to focus on the most relevant funds. In addition, they can generate a target-date analysis report which provides a side-by-side quantitative and qualitative analysis of the selected funds.

“With a vast universe of target-date funds to choose from, advisers and plan sponsors need a framework to sort out and identify the right option based on their goals,” said David Musto, head of J.P. Morgan’s retail investment-only retirement business. “With Target Date Compass, advisers can make sure they have thoroughly assessed the elements of a fund’s design and whether or not it is the right match for the plan.”

More information is available here.

The Markets October 27, 2009

DCIO: Growing Part of Asset Manager Business

The defined contribution investment only (DCIO) business is moving from a minor appendage of an asset management firm's sales effort to its backbone, according to Sway Research’s latest report.

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The study, which is based on recent surveys of 19 DCIO managers and 11 DC platform gatekeepers, reveals that at the average asset management company, the DCIO business generated 19% of firmwide gross sales and 28% of firmwide net sales in 2008. Thus, steady contributions from plan participants greatly lessened market-related net redemptions from DCIO assets relative to other business lines, Sway said in a release about the study.

The research found that more than half of those surveyed believe their firm’s DCIO business will experience a period of accelerated growth over the next 12 to 18 months, primarily as a result of investors’ needs to amplify retirement savings rates on the heels of stock market losses. Another 40% of DCIO managers believe growth rates will remain strong and steady.

“Although the DCIO market has its challenges—namely the rise of proprietary target-date funds and increased competition from managers of all sizes—this market is rapidly growing in importance to asset management executives, and for good reason,” said Chris J. Brown, Sway Research’s founder and principal.

The report features key DCIO business benchmarks, such as sales force productivity, headcounts and compensation, profitability across investment vehicles and relative to retail mutual funds, and annual DCIO sales and marketing budgets.

More information about purchasing “The State of DCIO Distribution: 2010—Strategies for Increasing Productivity and Profitability” is available at www.swayresearch.com.

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