Friday Financial Five – March 7th, 2014
Dan Forbes, GoLocalProv MINDSETTER™
Friday Financial Five – March 7th, 2014
It’s nice to have another country act as the test case for ideas with national implications. The myRA savings account shares similarities with another government sponsored retirement plan. The United Kingdom has the NEST (National Employment Savings Trust), meant to be offered by companies without a better option. It was introduced in 2008 in response to the decline of traditional pensions and should be fully operational by 2018. Workers put away 4 percent of their paycheck, the company matches 3 percent, and the government will add 1 percent. Unlike myRA, which invests in government bonds, the NEST allows for a more diversified investment selection.
ETF.com provides information on exchange-traded funds
The average investor continues to get more comfortable with exchange-traded funds. For those interested in learning more, ETF.com is a resource which can provide a wealth of information for different investment options, including issuers, inception dates and expenses. The site also provides an evaluation system based on efficiency, tradability, and fit. Efficiency details how well the investment fits its core premise, tradability refers to the available market, and fit is meant to relate the ETF to a broad market benchmark.
Keeping an eye on Europe
The situation in the Ukraine presents geopolitical issues, but it also reminds us to note Europe’s financial stability as a whole, a situation that not long ago threatened a global shake-up. Output is increasing but the recovery lags the rest of the world and the threat of a deflationary environment persists. The fear is that the conflict will lead to additional instability, including possible energy disruptions.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTComputerization and the American worker
Technological advances continue to change the landscape for the American worker. The Financial Times highlights an Oxford study in which it’s estimated that over 40 percent of Americans have jobs threatened by computerization. The hope is that the ability of computers to perform lower skill tasks will push humans into higher capacity work. If that’s not intellectually feasible, it could lead to large segments of the work population that simply get left behind.
Group calculates state pensions are 75% funded
While the focus on pensions continues across the country, a recent study indicates increased strength in pension funding levels, at least on a national level. According to the study by Wilshire Consulting, last year’s stellar market performance helped increased funding levels to 75 percent, a 3 percent increase over the year before. This also represents an 11 percent gain from the low in 2009.
Dan Forbes is a regular contributor on financial issues. He is a CFP Board Ambassador. He leads the firm Forbes Financial Planning, Inc in Providence, RI and can be reached at [email protected].
See How Much Providence Pays in Pension Fund Fees
Manager: Halpern Denny III
Manager Effective Fee: 0.0%
Asset Class: Private Equity
Assignment: Private Equity
Market Value: $188,318
% of Total Fund: 0.1%
Note: Fund is in liquidation.
Manager: William Blair VII
Manager Effective Fee: 0.0%
Asset Class: Private Equity
Assignment: Private Equity
Market Value: $434,649
% of Total Fund: 0.2%
Note: No further management fee is charged in 2013 other than a $2000 charge anticipated from January 2013 to mid March 2013. Fund is in liquidation.
Manager: SSgA Russell 2000 Growth
Manager Effective Fee: 0.08%
Asset Class: Equity Managers
Assignment: Small Growth (Index)
Market Value: $10,415,062
% of Total Fund: 3.9%
Note: Subject to $10,000 min annual fee.
Manager: SSgA Russell 1000 Growth
Manager Effective Fee: 0.08%
Asset Class: Equity Managers
Assignment: Large Growth (Index)
Market Value: $6,811,160
% of Total Fund: 2.6%
Note: Subject to $10,000 min annual fee
Manager: Vanguard MG ETF
Manager Effective Fee: 0.10%
Asset Class: Equity Managers
Assignment: Mid Growth
Market Value: $7,635,410
% of Total Fund: 2.9%
Manager: Invesco Venture Fund III
Manager Effective Fee: 0.25%
Asset Class: Private Equity
Assignment: Venture Fund of Funds
Market Value: $1,627,627
% of Total Fund: 0.6%
Note: Fee reduced to 0.25% in Q4-2013.
Manager: Columbia (Fleet)
Manager Effective Fee: 0.30%
Asset Class: Cash
Assignment: Large Value
Market Value: $397,606
% of Total Fund: 0.1%
Note: Subject to $15,000 min annual fee.
Manager: Columbia (ValuePath)
Manager Effective Fee: 0.37%
Asset Class: Equity Managers
Assignment: Large Value
Market Value: $20,453,356
% of Total Fund: 7.7%
Note: Columbia (Value Path): 0.40% on first $10m/0.35% on next $15m/0.30% on next $75m/0.25% on remainder.
Manager: Mellon (Prov Group)
Manager Effective Fee: 0.50%
Asset Class: Equity Managers
Assignment: Large Growth
Market Value: $6,641,213
% of Total Fund: 2.5%
Manager: Renaissance Installation Equity Fund
Manager Effective Fee: 0.50%
Asset Class: Hedge Funds
Assignment: Long/Short Equity
Market Value: $34,779,679
% of Total Fund: 13.0%
Note: Additional performance fee of 10%.
Manager: Q-BLK (Quellos) Strategic
Manager Effective Fee: 0.50% Min
Asset Class: Hedge Funds
Assignment: Fund of Funds
Market Value: $11,120,033
% of Total Fund: 4.2%
Note: The quarterly advisory fee paid to the Investment Manager is 0.1250% (0.50% per annum) of the Fund’s net assets on a quarterly basis when the Fund’s quarterly return is equal to or less than the return on the 90-day US Treasury bills plus 1.25%. The advisory fee will ratably increase, depending on the Fund’s performance, up to a maximum of 0.6250% per quarter (2.50% per annum).
Manager: Rogge Global Partners
Manager Effective Fee: 0.65%
Asset Class: Fixed Income
Assignment: Foreign Bonds
Market Value: $14,033,078
% of Total Fund: 5.3%
Manager: Boston Partners MV
Manager Effective Fee: 0.70%
Asset Class: Equity Managers
Assignment: Mid Value
Market Value: $24,556,046
% of Total Fund: 9.2%
Note: Boston Partners-MV: 0.70% on first $25m/0.60% on remainder.
Manager: Brandes
Manager Effective Fee: 0.74%
Asset Class: Equity Managers
Assignment: Foreign Equity
Market Value: $39,824,387
% of Total Fund: 14.9%
Note: Brandes Partners: 0.95% on first $10m/0.80% on next $10m/0.60% on next $30m/0.50% on remainder.
Manager: Boston Partners SV
Manager Effective Fee: 0.99%
Asset Class: Equity Managers
Assignment: Small Value
Market Value: $25,886,408
% of Total Fund: 9.7%
Note: Boston Partners-SV: 1% on first $25m/0.80% on remainder.
Manager: Point Judith II
Manager Effective Fee: 1.50%
Asset Class: Private Equity
Assignment: Private Equity
Market Value: $1,174,791
% of Total Fund: 0.4%
Note: Management fee is charged on committed capital and is equal to 2.5% during the first six years of the fund; 1.5% for the next two years and 1.0% thereafter. Point Judith also charges a performance fee of 20%.
Manager: Graham Global II*
Manager Effective Fee: 3.0%
Asset Class: Hedge Funds
Assignment: Global Macro
Market Value: $5,426,857
% of Total Fund: 2.0%
Note: Additional performance fee of 25%
