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Retirement Plan Best Practices: Investment Menu Construction
Retirement Plan Best Practices: Investment Menu Construction is the third in a five-part series outlining retirement plan best practices; the series began with plan governance and plan design, and will also cover plan monitoring and participant education.
How can plan sponsors build an investment menu that will facilitate improved long-term participant outcomes? Investment Menu Construction discusses how findings from behavioral economists can help guide the construction of an investment lineup that will make participant decision-making easier.
Read the article HERE (PDF file, 573KB)
MarketCast: Third Quarter 2017
In this MarketCast, senior research analyst Arthur Coyne, CFA, discusses global economic trends and events over the third quarter of 2017. To watch, click here: www.youtube.com
MarketCast: Second Quarter 2017
In this MarketCast, senior research analyst Arthur Coyne, CFA, discusses global economic trends and events over the second quarter and first half of the year. To watch, click here: www.youtube.com
Putting Your Mission First: Why non-profits are choosing discretionary advisory services
A growing number of non-profit organizations are switching to a discretionary approach to investment services, and we want to help organizations understand why the shift is happening and what it may mean for them. Increasingly complex markets, resource constraints, risk management, timely decision-making, and fiduciary oversight are just a few of the reasons organizations are finding a discretionary approach helpful. Putting Your Mission First: Why non-profits are choosing discretionary advisory services offers research and a discussion about how a discretionary model of investment advisory services can benefit non-profit organizations. (In a discretionary model, the investment advisor has discretion over some investment decisions within defined parameters, which differs from a traditional advisory relationship, in which the advisor makes recommendations and the committee is responsible for all final decisions.)
“A discretionary model can help the committee focus on governance rather than management, improve the effectiveness and efficiency of the investment process, and more closely aligns authority for portfolio decisions with the results.” We think the discretionary model can offer tremendous benefits; this paper outlines our thinking on why a non-profit organization should consider discretionary investment advisory services.
Read the article HERE (PDF file, 246KB)
WebReport Market Update 1Q 2017
In this WebReport Market Update, senior research analyst Arthur Coyne, CFA, provides a recap of the first quarter of 2017, offering context and perspective to current economic conditions and investment themes. To watch, click here: www.youtube.com
Retirement Plan Best Practices: Plan Design
How should a plan sponsor structure a plan’s eligibility requirements? Should the plan use automatic features? How can you make the most of an employer match? Should you offer a Roth and allow loans, and how do you keep fees fair? Arnerich Massena is pleased to announce the publication of a new white paper, Retirement Plan Best Practices: Plan Design. This paper helps plan sponsors navigate plan design decisions like these and more, addressing retirement plan structure issues and discussing plan design options and their considerations. This paper is the second in a five-part series outlining retirement plan best practices; the series began with plan governance and will also cover investment menu construction, plan monitoring, and participant education.
Read the article HERE (PDF file, 232KB)
Bringing Your Company’s Retirement Plan Into the Future
How do employers prepare for the future as they try to help employees save for their own futures? Arnerich Massena’s institutional team helps answer a few questions and provide guidance to retirement plan sponsors in the March issue of Oregon Business Magazine.
Read the article HERE (PDF file, 938KB)
WebReport Market Update 4Q 2016
In this WebReport Market Update, senior research analyst Arthur Coyne, CFA, provides a recap of the fourth quarter of 2016, offering context and perspective to current economic conditions and investment themes. To watch the interview, click here: www.youtube.com
Portland Business Journal article: “Tony Arnerich eases out of Arnerich Massena as part of management buyout”
In The Portland Business Journal’s coverage of Arnerich Massena’s transition to 100% employee ownership, author Matt Kish details the deals that will make it possible for Arnerich Massena to continue to serve its clients with the same philosophy and integrity that has characterized the firm since its founding by Tony Arnerich in 1991. The article also welcomes Dave Nute as Arnerich Massena’s new CEO.
Read the article HERE (PDF file, 129KB)
Turbulence and Transformation: Investment Trends to Watch for in 2017
Arnerich Massena’s research and analytical team explores some of the trends we are watching for in 2017, providing an interesting look into the cultural and political changes that may affect the investment environment for everyone.
Read the article HERE (PDF file, 306KB)
Consultant Ryan Cunningham Discusses the Investment Line-up of the Future with PlanSponsor Magazine editor Alison Cooke Mintzer.
What are some of the key issues and trends retirement plan sponsors should consider when crafting the investment line-up of the future? Arnerich Massena consultant Ryan Cunningham, CAIA, discusses the answer to this question with Alison Cooke-Mintzer, editor of PlanSponsor Magazine, in this short video interview. Knowing how difficult it is for plan sponsors to navigate all the trends, topics, and issues in the industry, Ryan provides some guidance to help sponsors understand what areas will be important as we move into the future. In the video, he addresses issues such as white labeling, active versus passive investment management, and ESG/Impact investing. To watch the interview, click here: www.youtube.com
Portland Business Journal Wealth Management Thought Leader Forum: A Wealth of Options for Smart Planning
Arnerich Massena's Reegan Rae joins the panel of experts in The Portland Business Journal's Wealth Management Thought Leader Forum. Wealth management professionals across a variety of disciplines provide insight on how families can make the most of their assets.
Read the article HERE (PDF file, 4MB)
Arnerich Massena Publishes New White Paper: Retirement Plan Best Practices: Plan Governance
Arnerich Massena is pleased to announce the publication of a new white paper, Retirement Plan Best Practices: Plan Governance. This paper is the first of a five-part series outlining retirement plan best practices; the series will also cover plan design, menu construction, plan monitoring, and participant education. In Plan Governance, we discuss best practice guidelines for setting up documentation and processes that will help your plan run smoothly and assist your committee in successfully carrying out their fiduciary responsibilities, including a handy fiduciary checklist for plan sponsors.
Read the article HERE (PDF file, 221KB)
Portland Business Journal article: "Investment in students creates bright future for the community"
Arnerich Massena won the Portland Business Journal's prestigious "Innovations in Philanthropy" Award in 2016 for the I AM Learning Partnership. Read the Journal's article for a moving view into the origins and scope of Arnerich Massena's incredible community service programs.
Read article HERE (PDF file, 3MB)
WebReport Market Update 3Q 2016
In this WebReport Market Insight, Arthur Coyne, senior research analyst, provides a recap of the third quarter of 2016, covering domestic and global economic trends and events.
Hedge Fund Headlines Mislead: Providing Perspective on Hedge Funds
Recent headlines are generating worries about hedge funds that may be misleading investors. Should investors be concerned about their hedge fund investments? In this paper, Arnerich Massena brings some perspective to the headlines and examines the value hedge funds bring to a portfolio. We discuss the important role hedge funds can play in a long-term investment strategy and how Arnerich Massena uses hedge funds. Download the white paper HERE (PDF file, 252KB)
Tony Arnerich Featured in The PBJ Interview
Each issue of The Portland Business Journal includes its popular feature, the PBJ Interview, highlighting a local business personality. The Journal selected Tony Arnerich to appear in its May 27, 2016 issue, in the article entitled "Investing for the Greater Good: Tony Arnerich on impact investing, towing Ken Kesey's magic bus and more." Download white paper (PDF file, 304KB)
Arnerich Massena Featured in Oregon Business Magazine
"Arnerich Massena uses impact investing to shape a better future for us all," by Stuart Watson, appears in the June issue of Oregon Business Magazine. Watson describes the evolution of Arnerich Massena's research into investing in what the world's population needs, highlighting some spectacular examples of the projects we're invested in. Download white paper (PDF file, 138KB)
WebReport Market Insight 1Q 2016
In this WebReport Market Insight, Arthur Coyne, senior research analyst, provides a recap of the first quarter of 2016, covering domestic and global economic trends and events. View the WebReport HERE
The Future of the Recordkeeping Industry
In 2014, thirteen merger/acquisition deals were made among retirement plan recordkeepers, a record number of consolidations and ownership changes. Looking ahead, we predict continuing changes in the recordkeeping industry as it evolves. How can plan sponsors plan and prepare for these industry shifts, safeguarding the services that are important to their plans? In this paper, we examine the future of the recordkeeping industry and how plan sponsors can use that knowledge to be prepared. Download white paper (PDF file, 183K)
Thematic Investing: Not Your Daddy's Portfolio
Published in The Portland Business Journal's 2015 Wealth Management and Financial Services Guide, this article by senior analyst Arthur Coyne, CFA, discusses a shift in the way investors are looking at asset allocation, with more focus on dynamic investment themes and less focus on traditional asset classes. Download white paper (PDF file, 653K)
Time out for investor bad behavior
Published in The Portland Business Journal's 2015 Wealth Management and Financial Services Guide, this article by senior analyst Bryan Shipley, CFA, CAIA, illustrates the shortfalls of how humans process information when it comes to investing. Download white paper (PDF file, 743K)
Mid Cap: The Goldilocks Asset Class
Domestic mid cap stocks may be on their way to being dubbed "the Goldilocks asset class." Long-term risk and return analysis demonstrates that mid cap stocks historically fit into a "sweet spot" of higher return for lower risk. In this paper, we'll look at why U.S. mid cap stocks hit this sweet spot, examining factors such as business cycle and earnings growth, and suggest how investors can take advantage of the opportunities mid cap has to offer. Download white paper (PDF file, 191K)
Fee Equality: Leveling the Playing Field for Participants
For most plan sponsors, managing their plan with the participants' best interests in mind is not just a fiduciary duty; it is a driving principle. Sponsors know that recordkeeping and other costs associated with managing the plan can have a significant impact on retirement outcomes. This is why we are encouraging plan sponsors to examine the idea of fee equalization. Employers don't usually intend to charge fees unfairly, but may be surprised to know that fees are often inadvertently structured inequitably. Fee equalization can eliminate fee imbalances across the participant base and help plan sponsors embed fundamental fairness into the plan. In this paper, we'll examine the ways in which traditional fee structures create imbalances among participants and consider ways to equalize fees. Download white paper (PDF file, 646KB)
A Private Equity Primer: Why and How to Invest in PE
The return potential is the beacon that draws investors to private equity; the asset class has outperformed all other asset classes over long time periods. In addition to returns, there is a sense of fulfillment and satisfaction that some private equity investors experience, knowing that their investment dollars are contributing to economic development and growth. The allure of being in the groundswell of new ideas can be a powerful attraction for the asset class. Before you invest in this asset class, it is important to understand how private equity works. In this paper, we provide the basic information needed to make an educated decision on whether or not private equity is right for you. Download white paper (PDF file, 187K)
The Paternalization of Participant-Directed Plans
This paper is relevant to retirement plan sponsors. The retirement plan industry has been refining and improving the defined contribution system over the last few decades, and many workers now have access to a variety of high-quality investments and in-depth investment education to assist them in planning for retirement, thanks to their employer-sponsored retirement plans. But even with these advantages, many participants are falling far short of their retirement goals. Studies of participant investment behavior indicate that poor investment choices may be a significant factor in chronic retirement savings shortfalls. In this paper, we'll examine the research covering participant investment behavior and discuss why paternalistic investment solutions may help to improve participants' long-term outcomes. Download white paper (PDF file, 138K)
The I AM Learning Partnership: Building Business in Partnership with Community
A primary objective of Arnerich Massena's I AM Learning Partnership is to exemplify business in partnership with community. We feel that, as a model for other corporate citizenship programs, the I AM Learning Partnership offers a unique and remarkable strategy with far-reaching impacts. As we move forward into the twenty-first century, it may be necessary for corporate America to step up and fill in the massive gaps caused by a lack of government funding. Education is one area in which corporate programs can provide the greatest support. In this paper, we provide a blueprint for businesses wishing to develop similar community programs. Download white paper (PDF file, 1105K)
Roth Retirement Savings: More Accessible Than Ever
This paper is relevant to retirement plan sponsors. The 2012 fiscal cliff legislation brought us, among other things, a new regulation making in-plan conversions to a Roth option more easily accessible; now, participants don't have to retire or separate from service to convert assets from a pre-tax account into a Roth. Employers are recognizing the significant benefits a Roth option offers to certain participants, and the new law provides an impetus for taking a deeper look at why you may want to consider adding a Roth option. In this paper, we discuss how a Roth option may be a valuable addition to a retirement plan, and considerations for plan sponsors when deciding whether or not to offer Roth contributions. Download white paper (PDF file, 675K)
To the Point: 2013 Tax Changes
New Tax Provisions Make 2013 More Taxing by Douglas R. Lovett, CPA, Geffen Mesher The American Taxpayer Relief Act of 2012 was signed into law in January. Tax rates did increase for upper-income earners, and the Act extended several key tax breaks that impact individual and business taxpayers. This article provides a brief summary of the most important provisions. Download a pdf (PDF file, 340K)
What is the Future of Funds of Hedge Funds?
Funds of hedge funds assets worldwide have decreased 42% from 2008 to 2012. The industry faces issues surrounding performance, fees, and liquidity. With these pressures, what does the future look like for funds of hedge funds? In this paper, we explore how the industry is changing and discuss how investors can evaluate and adapt their strategies. Download white paper (PDF file, 633K)
In Search of a Recordkeeper: Fiduciary Best Practices
On March 31, 2012, a U.S. District Court levied a $35.2 million judgment against ABB, Inc. for breach of fiduciary duty. The defendants included the company (ABB, Inc.), the committees serving the plan, and one executive who was named personally. With the appropriate precautions, this doesn't have to happen to your retirement plan or to you. In this paper, we describe the fiduciary best practices that can help prevent and protect against litigation for breach of fiduciary duty as it pertains to selecting and negotiating with recordkeepers. Download white paper (PDF file, 569K)
A Field Guide to Exchange-Traded Products
Since exchange-traded products leapt onto the scene in the early 1990s, their growing popularity has led to a proliferation of different types of exchange-traded products. There are now at least six different exchange-traded structures, each of which can behave differently in given market conditions. Investor interest in the various types of exchange-traded instruments continues to increase, but tracking the different structures and anatomies of each "species" can be as confusing as distinguishing between a Madagascar Partridge and a New Zealand Quail.
In our April 2012 white paper, Examining Exchange-Traded Funds, we discussed the proliferation of ETFs, describing how these relatively new investment products are constructed and traded. In this paper, we take a deeper look at the different species of exchange-traded products: how they're constructed, their risks, and how they might fit into a portfolio. Download white paper (PDF file, 584K)
Geffen Mesher & Company P.C.'s summary of Patient Protection and Affordable Care Act of 2010 tax changes. Click here to read.
Seeking the Investment Frontier
The Wild West, the Arctic poles, space: humans have always been fascinated by the frontiers of civilization, expanding our reach into the furthest, deepest places we can find. For investors, frontier markets not only inspire excitement and adventure, but also represent a wealth of virtually unexplored opportunities. As more investors have become aware of the advantages of "globalizing" their portfolios, emerging markets countries have become inundated with investor capital seeking to take advantage of their rapidly growing economies. But there exist on the fringes a number of countries that are either earlier in that cycle of development or on its precipice. In Seeking the Investment Frontier, we examine frontier markets, discussing why they are attractive to investors and what their risks are. Download white paper (PDF file, 516K)
Examining Exchange-Traded Funds
Exchange-traded funds (ETFs) have seen explosive growth since their introduction to the U.S. market in 1993. Although hugely popular, these investment products are not well understood by most investors. What are ETFs really, and how do they work? In this white paper, we review the history and construction of ETFs, and explore in depth the potential risks and advantages of exchange-traded funds.
Download white paper (PDF file, 637K)
Making the Most of Your Match
The employer match is making a comeback. But with varying match amounts, schedules, and formulas, how do employers maximize the value of the match? In Making the Most of Your Match, Arnerich Massena explores the effects of different types of employer matches. You'll learn how other employers structure matches, and what to consider when structuring yours.
Download white paper (PDF file, 603K)
Lifetime Retirement Income: Annuities and Beyond
Planning for retirement can be complicated, fraught with emotions, and overwhelming for participants. And for defined contribution plan sponsors, evaluating lifetime retirement income solutions may not be much easier! In Lifetime Retirement Income: Annuities and beyond, Arnerich Massena explores retirement income solutions, discussing the issues faced by participants and the fiduciary concerns of employers. In this white paper, you'll learn about annuities, guaranteed minimum withdrawal benefit options, managed accounts, annuity shopping services, and out-of-plan options, and what to consider when selecting among these choices.
Download white paper (PDF file, 646K)
The Profit in "Sustainable" Investing: Debunking the Myth
The opportunities in resource scarcity and demand growth
In 2009, Arnerich Massena published the award-winning Sustainability: Opportunities in a Green Market. Since then, we have recognized that the word "sustainable" carries so many connotations and misperceptions, many heavily weighted with politics, that it makes it difficult to see the opportunities beyond the veil of ideology. By redefining the word and understanding that the focus is on risk-adjusted return potential by defining aspects of the current market environment, specifically resource scarcity and demand growth, we open the door to educating investors about this valuable opportunity set. In this paper, we discuss resource-related macroeconomic trends and the opportunities they present, outlining some of the ways in which Arnerich Massena currently works to apply this theme to portfolios.
Download white paper (PDF file, 856K)
Target-Date Funds: Are They Hitting the Target?
Are target-date funds accomplishing their goal of providing long-term investment allocations that will provide growth, preservation of capital, and, finally, a secure nest egg for participants? In Target-Date Funds: Are They Hitting the Target? we review their progress, discuss the changes they have undergone, and ultimately ask the question, “Are they hitting the target?”
Download white paper (PDF file, 648K)
Also, see the July issue of PlanSponsor magazine to read a roundtable interview featuring Jake O'Shaughnessy, Arnerich Massena advisor.
Core Menu Construction: Optimizing Your Investment Options
In April 2010, Arnerich Massena discussed the concept of a tiered structure to the presentation of investment options in our white paper, Conservation of Choice. This structure, in which options are presented to participants in tiers beginning with the simplest decision (pre-mixed portfolios) and moving to more complex decisions, can help prevent paralysis of choice from overwhelming participants by presenting only a few choices at a time. We'd like to present another tool that can help plan sponsors meet these challenges without taking away the choices that are important to many participants: the simplified core menu as tier two of a tiered investment structure. In Core Menu Construction, we discuss how a simplified core menu might fit into a tiered investment option structure and why it may be advantageous.
Download white paper (PDF file, 627K)
Investment Committees: More than the sum of the parts
Investment committees steward trillions of dollars in assets, and their ability to function effectively as a team can have a tremendous impact on the performance of those assets. In this white paper, we discuss the potential pitfalls and biases of group behavior that can affect investment committees and explore how a committee can make the best use of its collective knowledge and diversity of experience.
Download white paper (PDF file, 679K)
Is your bond fund a wolf in sheep's clothing?
The new face of the bond fund is the topic of Arnerich Massena's newest white paper. The bond funds of today may be very different from what investors have known in the past and come to expect. No longer solely operating by using cash to purchase bonds, some funds are incorporating derivative instruments that have different rules and risks from traditional bonds. In this paper, we explore the types of risks bond funds may carry and whether they continue to offer stability to a portfolio.
Download white paper (PDF file, 207K)
Active Versus Passive Investment Management: Analysis Update
In 2007, Arnerich Massena analyzed the performance of an actively managed strategy relative to a passively managed strategy. This white paper provides updated research and analysis of this issue.
Download white paper (PDF file, 204K)
Conservation of Choice: Simplifying Investment Options to Better Serve Participants
Over the past decade, retirement plans have been the beneficiary of a variety of "improvements," including bells and whistles of all sorts. Participants have been inundated with a growing spectrum of investment choices, reams of materials meant to educate and inform their investment choices, and advice to further guide their investment strategy. So why is it that participant-directed accounts continue to underperform defined benefit accounts, regardless of the number and quality of investment options offered? In this paper, the second in a topical series discussing the applications of behavioral economics in defined contribution retirement plans, we explore why retirement plan participants tend to undersave, misunderstand their investment options, and make poor allocation decisions. Based on studies in behavioral finance, we offer some potential solutions for structuring plan options to encourage participants rather than frustrate and confuse them.
Download white paper (PDF file, 154K)
Behavioral economics helps explain the reality of participant behavior
The rational "homo economicus" of classic economic theory has turned out to be a mythical creature. In reality, people making financial decisions fall prey to a variety of illogical thinking patterns. Surprisingly, these irrationalities are rather consistent and follow their own rules of logic. The study of the systematic ways in which people make irrational financial decisions is behavioral economics. This white paper, in providing an introduction to the field of behavioral economics, may help retirement plan sponsors better understand participant behavior and the reasons why a different approach to plan structure and communication could be in order.
Download white paper (PDF file, 190K)
Arbitrage, Leverage, and Short Sells, Oh My!
Making Sense of Hedge Funds
As one of the least-understood investment types in the industry, hedge fund investing is plagued by myths and misconceptions. Arnerich Massena's white paper, Arbitrage, Leverage, and Short Sells, Oh My! Making Sense of Hedge Funds is designed to help investors understand the fundamentals of hedge fund strategies and investing. We hope this publication serves to define and clarify hedge funds, as well as identify some key considerations for those investing, or interested in investing, in this space.
Download white paper (PDF file, 274K)
Economic Stimulus and the Great Inflation Debate: Why we're paying attention to inflationary pressures
What do The Wizard of Oz, Cabaret, and The Grapes of Wrath have in common, and how is this related to our current economic environment? Find out when you read Arnerich Massena's most recent white paper, Economic Stimulus and the Great Inflation Debate: Why we're paying attention to inflationary pressures. Even though deflation is on everyone's mind at present, there are signs that inflation is around the corner. In this paper, we explain why we are preparing for this environment and what our strategies are for meeting this challenge.
Download white paper (PDF file, 125K)
Not All Target-Date Portfolios Are Created Equal
As plan sponsors work to find solutions that meet their participants' needs, target-date portfolios are becoming more and more popular investment options in defined contribution plans. But there is wide variation in how target-date strategies are constructed. We believe it is important for plan sponsors considering these options to understand the issues and differences. For this reason, we present the information in this white paper, Not All Target-Date Portfolios Are Created Equal, so that plan sponsors can make informed decisions when selecting target-date portfolios for their participants.
Download white paper (PDF file, 164K)
Sustainable Investing: Opportunities in a green market
The Arnerich Massena research team is pleased to announce the publication of Sustainable Investing: Opportunities in a green market. Our research has found significant investment opportunities in sustainability and climate change mitigation. This paper provides a discussion of the business risks that have developed, both from the direct effects of climate change and also from resulting changes in the social and political climate. With every risk, there also come opportunities, and we discuss how investors may be able to take advantage of these opportunities with a sustainable investing model. It is our hope that this white paper serves to provide a context for further discussion and exploration of sustainable investing.
Download white paper (PDF file, 201K)
Going Global; Why understanding currency diversification within a global portfolio is important for U.S.-based investors
We are pleased to announce the publication of Going Global; Why understanding currency diversification within a global portfolio is important for U.S.-based investors. We believe this topic has significant impact on investors in today's global environment. The subject of currency diversification is complex and requires some contextual background, which we've allowed for in a longer piece. However, we feel that the impact and importance of this topic justifies a bit of extra time and firmly believe that you will find it of value.
Download white paper (PDF file, 238K)
Active versus Passive
We believe strongly that providing client education is a key element in creating a successful consulting relationship. One of our continuing objectives as your consultant is to provide you with timely communication and educational information. We are pleased to publish another of our white papers: Active vs. Passive Management: Putting the debate into perspective. We find the topic of active and passive management to be particularly relevant in today's investment environment and are providing this white paper in the hope that you will find it both interesting and informative.
Download white paper (PDF file, 210K)