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 change."

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.

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.