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About Bob Collie

Fiduciary Matters blog

Insights for institutional investors

July 21, 2014
Author:

Access matters to performance

Why do we see such significant performance differences between the largest non-profit organizations (the multi-billion dollar institutions) and the smaller non-profits (say, under $500 million)? Is it expertise? Asset allocation? Risk tolerance? While all of these are causes of return differences, they are not exclusive to the larger pools of capital. What does tend to be exclusive to these larger pools is access. Most of the large, well-known non-profit organizations have incredible access to the best and brightest money managers. Why is that?

Categories: Categories: Non-profit strategy
July 14, 2014
Author:

All passive DC plans: Whose interest do they serve?

I recently saw some interesting statistics from a Defined Contribution (DC) plan sponsor survey. Sponsors were asked why they implemented passively managed funds in their plan. Nearly 75% of these sponsors said their primary reason was either “alleviate threat of lawsuits” or “fiduciary concerns.” The others said “they do not believe active managers outperform” or cited “cost of investments is the most important factor.”

Categories: Categories: Defined contribution strategy
July 8, 2014
Author:

It’s time to adopt a dynamic mindset…

Since the financial crisis, there has been the growing realization that setting a good strategic asset allocation may no longer be enough for investors to reach their desired goals. Investors have started moving beyond the idea of a static asset allocation and are introducing dynamic elements into their investment programs. The “set it and forget it” mindset is changing.

Categories: Categories: Equities, Fixed income
June 30, 2014
Author:

The Defined Benefit system is becoming a Cash Balance system

The defined benefit (DB) world is changing, and in ways you may not be aware of. Before your mind jumps to freezing DB plans , the latest risk transfer craze , or even the gradual shift to defined contribution (DC), consider this: Cash Balance plans have increased six-fold since the year 2000, while the number of DC plans has decreased by nearly 10%. Steadily over time, Cash Balance plans have taken over a sizeable chunk of the DB market and notched their own place in the U.S. retirement system.

June 18, 2014
Author:

Busting the myth that this is a high volatility environment

The assertion we are in the midst of a volatile equity market environment has become a common headline in the popular press. The facts, however, suggest otherwise. I’d like to add the claim “these are volatile times” to the list of myths that need to be busted.

Categories: Categories: Market volatility
June 11, 2014
Author:

Return objectives in DC plans? Look inside a good target date fund to find out

At Russell, we see our role as being to help our clients earn the rate of return they require at a level of risk they can survive. In the past couple of blogs, I have looked at the required returns for nonprofit organizations and for defined benefit pension plans but probably the cleanest application of this principle today is found in the world of defined contribution and, in particular, in the construction of target date funds (TDFs).

Categories: Categories: Defined contribution strategy
June 4, 2014
Author:

What is a pension plan’s return objective? Well, it’s not ELTRA…

At Russell, we see our role as being to help our clients earn the rate of return they require at a level of risk they can survive. That’s a neat formulation: but when it comes to defined benefit pension plans, we need to stop and ask ourselves what precisely is the rate of return that they require.

Categories: Categories: Defined benefit strategy