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Friday Financial Five – March 7th, 2014

Friday, March 07, 2014

 

The UK equivalent of myRA

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.

Computerization 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 dforbes@forbesplanning.com.

 

Related Slideshow: See How Much Providence Pays in Pension Fund Fees

Per investment information obtained by GoLocal, the following are the management fees paid by the City of Providence Employees Retirment System (as of April 2013 -- Graham Global funds were moved at the last city Investment commission meeting).  

Prev Next

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.

Prev Next

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.

Prev Next

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.

Prev Next

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

Prev Next

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%

Prev Next

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.

Prev Next

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.

Prev Next

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.

Prev Next

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%

Prev Next

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%.

Prev Next

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).

Prev Next

 

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%

 

Prev Next

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.

Prev Next

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.

Prev Next

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.

Prev Next

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%.

Prev Next

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%

 

 

 

 
 

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