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Full-Text Articles in Business
Conflict Of Interest In 401(K) Funds, Steven D. Dolvin
Conflict Of Interest In 401(K) Funds, Steven D. Dolvin
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Companies often hire third party administrators (TPAs) to manage their respective 401(k) plans. Some companies simply provide documentation and advice; however, other TPAs actually offer their own proprietary (in-house) funds as investment alternatives. New research () shows that these funds often carry higher fees and have lower returns, illustrating the impact of a conflict of interest. This is particularly pronounced for banks and insurance companies acting as TPAs.
Target Date Funds And Dollar Cost Averaging, Steven D. Dolvin
Target Date Funds And Dollar Cost Averaging, Steven D. Dolvin
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Target Date Funds simplify the investment process for investors, as such funds oversee changing asset allocations through time. A secondary benefit is that with these "set it and forget it" funds, investors are less likely to try to time the market. This is good since such activity generally hurts (rather than helps) most investors. In fact, staying the course allows investors to benefit from downside market volatility, as continued investment enables investors to buy more shares at lower prices, so-called dollar cost averaging. See article here, WSJ.
Mutual Fund Fees Continue To Fall, Steven D. Dolvin
Mutual Fund Fees Continue To Fall, Steven D. Dolvin
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Passive funds have historically outperformed active funds, and much of this difference is likely driven by the lower fees charged by passive funds. A discusses the impact on both investors and the industry.
Mutual Fund Fees, Steven D. Dolvin
Mutual Fund Fees, Steven D. Dolvin
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As we all know, fees impact net returns. For mutual funds, aside from any load, the two primary fees charged are management fees and 12b-1 fees. The management fees are easy to understand. The 12b-1 fees, however, are not. They are designed to cover distribution costs, but this is a broad term. In reality, much of this fee is used to pay brokers/advisors for directing client business to the funds. As a recent article (Investment News) suggests, the SEC may begin to limit such payouts.