PLANSPONSOR - October/November 2021 - 31
PLAN BENCHMARKING | INVESTMENT TYPES
Ways to analyze the
allocation, risk and returns of
the plan menu's most important funds
BENCHMARKING has multiple roles in the institutional retirement plan space. A critical one is to help
plan sponsors, and their participants, understand the mechanics and content of their plan's investment
program, says Elise Thiemann, director, investments with Willis Towers Watson in Chicago. " This is an
important part of what we do for many of our clients and for plan sponsors, " she says.
Whether the goal is stated formally- " Outperform the benchmark " -or informally- " Beat the
bogey " -using benchmarks to measure investments' performance is pervasive. Their original purpose
was to track selected stocks' aggregate performance, which is still a primary role, but nowadays benchmarks
are used to measure additional quantitative data such as portfolio volatility and management fees.
Benchmarks are essential tools, Thiemann says, for objective plan design review: " Is our investment
program, and each investment individually, serving the needs of participants, and, probably most importantly,
is it acting or performing in the way we expect it to? "
Benchmarks also provide guidance for investment managers and investors, says Erin Browne,
managing director and portfolio manager for asset allocation and target-date funds (TDFs) with PIMCO
in Newport Beach, California. They provide a starting point for portfolio construction and inform on how
that particular collection of investments should be managed, long term, from a risk and return perspective.
Using benchmarks has limits, though. Wes Crill, head of investment strategists with Dimensional
Fund Advisors (DFA) in Austin, Texas, cites the example of a small-cap-value fund. If the fund has a
small-cap-value index as its benchmark, that is a good indication that the fund's investment approach is
in line with the small-cap-value asset class, he explains. Yet, the use of that index does not tell an investor
everything about the portfolio's positioning. " You can have many differences between investment strategies
that use the same benchmark, " says Crill. " And [alternatively], within one asset class, again using
small value as an example, you might have many benchmarks that are used by the asset managers in
there. So, it's a start, in terms of understanding the asset allocation of an investment strategy, but it's not
a comprehensive measure or evaluation of what they're going after. "
Art by Klaus Kremmerz
PLANSPONSOR.COM October - November 2021 31
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PLANSPONSOR - October/November 2021
Table of Contents for the Digital Edition of PLANSPONSOR - October/November 2021
INSIGHTS
INDUSTRY ANALYSIS
RULES & REGULATIONS
UPFRONT
To Attract and Retain
2021 DC Plan Benchmarking Survey
Investment Appraisal
The Evergreen Discussion
Retirement, by Auto-Pilot
FIDUCIARY FORUM A Useful Gauge
INSIDE ANGLE ESG for Fiduciaries
PLAN PROFILE Picture of Health
PLANSPONSOR - October/November 2021 - Cover1
PLANSPONSOR - October/November 2021 - Cover2
PLANSPONSOR - October/November 2021 - 1
PLANSPONSOR - October/November 2021 - 2
PLANSPONSOR - October/November 2021 - 3
PLANSPONSOR - October/November 2021 - INSIGHTS
PLANSPONSOR - October/November 2021 - 5
PLANSPONSOR - October/November 2021 - INDUSTRY ANALYSIS
PLANSPONSOR - October/November 2021 - 7
PLANSPONSOR - October/November 2021 - RULES & REGULATIONS
PLANSPONSOR - October/November 2021 - 9
PLANSPONSOR - October/November 2021 - 10
PLANSPONSOR - October/November 2021 - 11
PLANSPONSOR - October/November 2021 - UPFRONT
PLANSPONSOR - October/November 2021 - 13
PLANSPONSOR - October/November 2021 - 14
PLANSPONSOR - October/November 2021 - 15
PLANSPONSOR - October/November 2021 - 16
PLANSPONSOR - October/November 2021 - 17
PLANSPONSOR - October/November 2021 - To Attract and Retain
PLANSPONSOR - October/November 2021 - 19
PLANSPONSOR - October/November 2021 - 20
PLANSPONSOR - October/November 2021 - 21
PLANSPONSOR - October/November 2021 - 2021 DC Plan Benchmarking Survey
PLANSPONSOR - October/November 2021 - 23
PLANSPONSOR - October/November 2021 - 24
PLANSPONSOR - October/November 2021 - 25
PLANSPONSOR - October/November 2021 - 26
PLANSPONSOR - October/November 2021 - 27
PLANSPONSOR - October/November 2021 - 28
PLANSPONSOR - October/November 2021 - 29
PLANSPONSOR - October/November 2021 - Investment Appraisal
PLANSPONSOR - October/November 2021 - 31
PLANSPONSOR - October/November 2021 - 32
PLANSPONSOR - October/November 2021 - 33
PLANSPONSOR - October/November 2021 - The Evergreen Discussion
PLANSPONSOR - October/November 2021 - 35
PLANSPONSOR - October/November 2021 - Retirement, by Auto-Pilot
PLANSPONSOR - October/November 2021 - 37
PLANSPONSOR - October/November 2021 - FIDUCIARY FORUM A Useful Gauge
PLANSPONSOR - October/November 2021 - INSIDE ANGLE ESG for Fiduciaries
PLANSPONSOR - October/November 2021 - PLAN PROFILE Picture of Health
PLANSPONSOR - October/November 2021 - Cover3
PLANSPONSOR - October/November 2021 - Cover4
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