This trend could be raising risks in some target date funds, especially for older investors.
Millions of investors rely on their target date funds to not only help grow wealth, but preserve that wealth during bouts of market volatility. Traditionally, target date providers have relied on high-quality bonds to help provide this balance.
But credit quality can vary significantly within these funds’ bond exposure, even within investment-grade credit (rated BBB/Baa and above). Investment-grade bonds of lower credit quality have tended to fare worse in equity-market downturns. And the risk could be rising in today’s uncertain economic environment, given increased corporate leverage and a rise in lower quality bond issuance.
By Mark Hackett
In the impressive market recovery since last March, the S&P 500® Index rallied 77%, largely in response to unprecedented monetary policy accommodation by the Federal Reserve. The FOMC cut the Fed Funds target rate to 0% on March 15, 2020 and accelerated its bond-buying program to provide liquidity and avoid a deflationary spiral. Concerns were growing that the economic shutdown and shifts in consumer behavior would keep inflation below the Fed’s 2% target. At the recent FOMC meeting, Fed Chair Powell reiterated the central bank’s commitment to a dovish monetary stance until inflation targets are achieved. The data continues to show modest inflation, with consumer price inflation (CPI) up just 1.4% from a year ago despite pressure from commodities and housing. This marked the 11th-consecutive month that CPI was below the 2% target. Since the target was first announced by the Fed in 2012, inflation has exceeded 2% in 38% of months, but only five times in the last
Women can close the financial planning gap with help from advisors
By Ann Bair, Senior Vice President, Nationwide Financial Marketing
As someone who has spent the better part of her professional career in financial services, I can attest to how important it is for women to close the financial preparation gap. Unfortunately, the ripple effects of the COVID-19 pandemic made that task more difficult last year.
Today, women are less optimistic, more concerned and less prepared in their financial lives than they’ve been in years, primarily due to the pandemic. But many of us are also feeling more empowered; last year, more women were working with advisors and financial professionals than they were five years ago.
Markets aim to begin 2021 similar to how 2020 ended
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Markets are poised to begin 2021 similar to how 2020 ended, with a broad market rally. Last week saw a strong close to the year, with the S&P 500® Index touching its 33rd record close for 2020. The primary drivers of market strength continue to be optimism surrounding the vaccines and the benefits from the latest round of fiscal stimulus. The S&P 500 gained 68% from the March low after losing more than one-third of its value in less than a month, finishing the year with a return of 18.4%, the sixth-best performance in the past 20 years. Notable winners including the NASDAQ (+44.9%), the Russell 1000 Growth Index (+39.5%) and MSCI Emerging Market Index (+18.7%).
Index fund investors can now weigh in on S&P 500® corporate resolutions, a landmark announcement from ONEFUND
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ONEFUND launches Index Proxy Polling for flagship fund, INDEX. An investor driven solution to the growing institutional monopoly of index funds.
“Who better knows the best interests of the shareholder than the shareholder themselves? Their input is vital. We think this is a transformative first step that the industry will eventually follow.” said Mike Willis, Founder of ONEFUND HONOLULU, Hawaii (PRWEB) January 14, 2021 ONEFUND, a private, independent FinTech company, today announced that it has added Index Proxy Polling as a shareholder feature for its S&P 500® Equal Weight index fund, ticker symbol INDEX. Index Proxy Polling enables shareholders to weigh in on important resolutions from 500 of America’s largest corporations. From Environmental, Social and Governance (ESG) matters t