It’s 2017, do you know where your 401k investments are?
As 2017 is upon us, the investment landscape becomes a bit more crowded with the advent of new investing vehicles. The trend today is that more and more retirement plan assets are being managed under asset holding structures long considered to be Mutual Fund alternatives. Morningstar columnist Mr. John Rekenthaler has announced that plan sponsors can now anticipate approximately 3,800 new Mutual Shares will hit the exchanges this year in the form of “T shares.” These new T Shares which will carry a much reduced 12-(b)1 fee and share class fee for those plan sponsors using the funds in their qualified plans.
Relief from Regulators
To make these funds more acceptable by Regulators and plan sponsors alike, the Sales Charge is anticipated to be in the range of 2.5% and the 12-(b)1 fee should be approximately .25% for the “T Share Class.” As compared to A Shares, Mr. Rekenthaler states these funds must Die.
Traditional mutual fund A Shares have carried mutual funds sales charges of 5.75% and a substantially greater 12-(b)1 fee.
New Environmental, Sustainable and Governance Funds
This year Natixis Global Asset Management will introduce a series of Target Date Funds that extend out to 2060 in 5 year increments. This series of funds will employ securities which have a favorable impact on sustainability, the environment or corporate governance.
Respondents to the firm’s Global 2016 Survey of Individual Investors indicated the importance of investing in companies which have an interest in sustainable and ethical practices. Research indicates that there is a strong interest in working with an investment company that shares the same values and objectives as the investor. These finds are scheduled to be offered during the first quarter of 2017.
Prudent Retirement Committee members will want to document that they have reviewed each of these new offerings. The mutual funds with the substantially lower 12-(b)1 fee may make sense for your plan. The Natixis target date funds may possibly be exactly what your plan participants are looking for.
