Products December 21, 2011

Mercer Paper Discusses Impact of Attention on Fees

Heightened scrutiny of retirement plan fees may impact how fees are charged and allocated to participants.
Reported by

The paper, “Fee Allocation: Trends and Strategy,” says the recent focus on fees has fostered a movement away from an asset-based approach for calculating administrative fees to a per-capita approach. Mercer contends that soon plan sponsors and participants will be questioning whether it makes sense for higher-balance retirement plan participants to pay more in fees than those with lower balances when it costs the same to administer large or small accounts.  

It details examples of asset-based versus per-capita-based fee allocations, and suggests alternative allocation methods.  

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The report includes a list of steps plan fiduciaries can take to help ensure they are fulfilling their responsibilities to participants as well as minimizing their own fiduciary risk.  

A copy of the paper is available at http://www.mercer.com/articles/1435350.

Products December 21, 2011

Dow Jones and UBS Securities Launch Index

Dow Jones Indexes and UBS Securities LLC launched the Dow Jones-UBS Commodity Index 2-4-6 Forward Blend.  
Reported by

The new index is a gauge that measures diversified exposure to longer-dated commodity futures contracts spread across the commodity price curve.

An enhanced version of the Dow Jones-UBS Commodity Index, the Dow Jones-UBS Commodity Index 2-4-6 Forward Blend reflects the return of underlying commodity futures price movements. Also introduced was a total return version of the index, which reflects the return on fully collateralized futures positions.

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The index is constructed as an equally weighted basket of the two-month, four-month and six-month forward versions of the Dow Jones-UBS Commodity Index, with the notional exposure to the three component indexes rebalanced at the end of every month so that each index represents one-third of the basket. The index is quoted in USD.

“This new gauge is a welcome addition to the Dow Jones-UBS Commodity Index family,” said Michael A. Petronella, president, Dow Jones Indexes. “The Dow Jones-UBS Commodity Index 2-4-6 Forward Blend tracks diversified exposure across a range of longer-dated commodity contracts—a measure growing in importance for this asset class.” 

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