Go Custom


When it comes to default investments, consultants say custom or semi-custom target-date funds may help calibrate risk exposures, aid diversification, reduce fees and improve asset-manager selection.

*Prebuilt glide-path program from recordkeepers that uses core menu options

Manage Actively


Nearly all consultants said active management is important or very important in non-U.S. bonds (98%), U.S. bonds (92%) and non-U.S. equity (87%).

98% Very Important/Important

2% Somewhat Important

0% Not Important

92% Very Important/Important

8% Somewhat Important

0% Not Important

61% Very Important/Important

31% Somewhat Important

8% Not Important

87% Very Important/Important

11% Somewhat Important

2% Not Important

21% Very Important/Important

42% Somewhat Important

37% Not Important

Preserve Capital


Yes to stable value. No to prime money market funds. See the capital preservation alternatives consultants are most likely to recommend – or not.

Protect


With inflation on the rise, inflation-hedging strategies can help protect portfolio purchasing power. Consultants recommend TIPS, multi-asset strategies and REITS as stand-alone offerings, and commodities only in blended strategies.

*Blended refers to a multi-manager/while label core option or in a sleeve in a custom target-date/risk portfolio.
**Stand-alone refers to a stand-alone option on the core investment menu.

Retirement insights from the country's top consultants

66 DC consultants and advisors from 23 states
11k+ DC plan sponsor clients represented
$4.2+ trillion in clients DC assets

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Survey responses were made between 21 December 2015 and 15 January 2016.

Trends Survey cover

Disclosures

All investments contain risk and may lose value. Investing in the bond market is subject to risks, including market, interest rate, issuer, credit, inflation risk, and liquidity risk. The value of most bonds and bond strategies are impacted by changes in interest rates. Bonds and bond strategies with longer durations tend to be more sensitive and volatile than those with shorter durations; bond prices generally fall as interest rates rise, and the current low interest rate environment increases this risk. Current reductions in bond counterparty capacity may contribute to decreased market liquidity and increased price volatility. Bond investments may be worth more or less than the original cost when redeemed. Inflation-linked bonds (ILBs) issued by a government are fixed income securities whose principal value is periodically adjusted according to the rate of inflation; ILBs decline in value when real interest rates rise. Treasury Inflation-Protected Securities (TIPS) are ILBs issued by the U.S. government. Equities may decline in value due to both real and perceived general market, economic and industry conditions. Commodities contain heightened risk, including market, political, regulatory and natural conditions, and may not be suitable for all investors. REITs are subject to risk, such as poor performance by the manager, adverse changes to tax laws or failure to qualify for tax-free pass-through of income. Investors should consult their investment professional prior to making an investment decision.

This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO is a trademark of Allianz Asset Management of America L.P. in the United States and throughout the world. ©2016, PIMCO

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