SOURCE: Barclays Global Investors
November 07, 2008 11:20 ET
Industry's First Target-Date Fund Celebrates 15 Years Since Groundbreaking Launch
BGI's LifePath Portfolios Continue to Innovate
SAN FRANCISCO, CA--(Marketwire - November 7, 2008) - Barclays Global Investors, N.A. (BGI),
one of the world's largest asset managers, today marked the 15th
anniversary of the first target-date fund with the debut of LifePath
Portfolios. With LifePath Portfolios, BGI pioneered a groundbreaking
solution for investors facing retirement investing, providing them with a
one step, automatically diversified investment strategy that strives to
meet their long-term savings goals.
BGI pioneered target-date, or lifecycle funds, in November 1993.
Target-date funds since have become one of the fastest growing segments of
the retirement investment market and are available in 68 percent of defined
contribution (DC) plans.(1) According to the most recent data from the
Investment Company Institute, target-date funds assets totaled $185 billion
at the end of the first quarter of 2008 and almost 90 percent of lifecycle
fund assets were held in retirement accounts. LifePath Portfolios account
for nearly $23 billion of the category total, made available in some of the
largest defined contribution plans in America.
"The introduction of target-date funds marked a significant evolutionary
step in the defined contribution market, offering plan participants a
simple choice for a sophisticated approach to retirement investing," said
Kristi Mitchem, head of the U.S. defined contribution group at BGI. "We
recognized that many participants didn't contribute adequately or failed to
adjust their portfolio allocation as needed. LifePath was at the forefront
to help remove these barriers and guide participants into an appropriately
diversified, professionally managed portfolio."
LifePath was the first DC product to address both investment and behavioral
risks, and provide participants with the opportunity to achieve a better
investment outcome. While behavioral finance studies show that most
employees know they should save for retirement, realistically inertia
prevents them from actually saving, let alone soundly managing investment
risk over time. Today, these behavioral and financial risks are still
prevalent for DC investors, particularly in today's markets.
"LifePath is more relevant than ever as the qualified default investment
alternative for defined contribution plans," Mitchem said. "LifePath also
helps participants avoid common investment pitfalls, such as buying high
and selling low, chasing funds with impressive short-term performance,
over-allocating in stable value or money market funds, and failing to
adjust asset allocations as retirement gets closer or as market conditions
Now, target-date funds have become a favored option for plan sponsors
seeking innovative solutions to boost 401(k) plan enrollments, while
offering participants a streamlined and less confusing approach to their
long-term financial security. According to Hewitt, the number of 401(k)
plans offering lifecycle funds is expected to continue to grow now that the
Pension Protection Act and accompanying Department of Labor and Internal
Revenue Service regulations have given sponsors more guidance and
protection for helping employees prepare for retirement.
LifePath marked the first generation of significant innovation in the
defined contribution marketplace. Last year, BGI ushered in the second
generation of retirement investing innovation with SponsorMatch, a unique
investment option that allows plan sponsors to offer, for the first time,
comprehensive defined benefit-like solutions for retirement saving within
the constraints of defined contribution plans.
With SponsorMatch, plan sponsors gain access to a fund that includes BGI
investment portfolios and deferred annuity portfolios, which combine to
provide and increase an income stream over time as a participant ages.
"Many employees put themselves at risk for running out of money in
retirement. No matter how much they save during their working years, it
can be a challenge to effectively manage their nest egg in retirement,"
Mitchem said. "SponsorMatch addresses this need by providing a source of
lifetime income within a company's defined contribution plan. As LifePath
Portfolios did before, SponsorMatch continues our history of providing
innovative solutions that serve both the evolving needs of plan sponsors
while helping participants to better prepare for retirement."
About Barclays Global Investors
Barclays Global Investors is one of the world's largest asset managers and
a leading global provider of investment management products and services
with more than 3,000 institutional clients and over $1.9 trillion of assets
under management as of June 30, 2008. BGI transformed the investment
industry by creating the first index strategy in 1971 and the first
quantitative active strategy in 1979. BGI is the global product leader in
exchange traded funds (iShares® exchange traded funds) with over 330
funds for institutions and individuals globally.
Carefully consider the funds' investment objectives, risk factors and
charges and expenses before investing. This and other information can be
found in the funds' prospectuses, which may be obtained by calling
1-877-BGI-1544 (1-877-244-1544). Read the prospectus carefully before
Investing involves risk, including possible loss of principal. Risk
controls, asset allocation models, and diversification do not promise any
level of performance or guarantee against loss of principal.
The LifePath® strategies are available as collective investment funds or
as mutual funds. There are structural and regulatory differences between
collective funds and mutual funds that may affect their respective fees and
performance. SponsorMatch is offered as collective investment funds.
Barclays Global Investors, N.A., a limited purpose national trust bank,
manages the LifePath® Portfolios collective investment funds and provides
fiduciary and custody services to various institutional investors. Funds
managed by Barclays Global Investors are not insured by the Federal Deposit
Insurance Corporation or any other government agency and are not guaranteed
by BGI or its affiliates. A collective investment fund is privately
offered; prospectuses are not required. The collective investment funds
maintained by Barclays Global Investors, N.A. are available only to certain
qualified employee benefit plans and governmental plans and not offered to
the general public.
The LifePath® Portfolios are distributed by SEI Investments Distribution
Co. (SEI). Barclays Global Fund Advisors (BGFA) serves as investment
adviser to the Master Portfolios, in which each LifePath Portfolio invests
all of its assets and to the underlying funds in which the Master
Portfolios invest. BGFA is a subsidiary of Barclays Global Investors, N.A.,
neither of which is affiliated with SEI.
This is not intended to be investment, legal, accounting or tax advice. You
may not rely on this publication in evaluating the merits of investing in
SponsorMatch. Any investment decision with respect to SponsorMatch should
be made by you solely upon the information contained in any final offering
document or other offering materials relating to SponsorMatch. SponsorMatch
is subject to the terms and conditions set forth in any such final offering
document or materials (and any changes thereof).
SponsorMatch is not itself an insurance product. BGI is not issuing or
selling insurance or promising any financial guarantee or periodic payment.
Annuities are provided by one or more insurance companies.
LifePath® and SponsorMatch are trademarks of Barclays Global
Investors, N.A. The LifePath® products are covered by U.S. patents
5,812,987 and 6,336,102. MF-0005-1108
(1) Source: Deloitte Annual 401(k) Benchmarking Survey 2005/2006.