1) Goldman Sachs Makes Changes to its Target Date Portfolios SEC Filings | 9/14/2018
Because… Goldman Sachs folded six target-date funds (TDFs) in 2012, but re-entered the space in 2016 by adopting four TDFs from Madison Asset Management and adding another four also sub-advised by Madison. However, its TDF assets of $256 million as of June 2018 suggest sluggish growth over the past two years. Its TDFs only accounted for 0.3% of the firm’s assets, compared to Vanguard’s 11.0% and T Rowe’s 28.0%, according to Morningstar. Goldman Sachs TDFs, with 6% in active strategies, charged an average expense ratio of 0.47% for the cheapest share class, compared with Fidelity Freedom Index series’ 0.10% with 5% in active strategies. Whether the fee reduction, internalization of fund management, and changes to the glide path can revitalize its TDFs remains to be seen.
2) Weekly Flows Show Flight to Safety ETF.com | 9/14/2018
Because… Although the weekly data showed that investors flocked to safety, U.S. Equity has led YTD ETF sales this year. Based on Morningstar data, U.S. Equity garnered $67.0 billion in the first eight months, compared with flows of $59.3 billion into Taxable Bond. International Equity, the best-selling asset class in the same time period last year, experienced the most dramatic sales decline. With inflows of $27.7 billion, its sales dropped 73.6% from the previous year’s intake of $105.1 billion. ETFs brought in a total of $182.0 billion this year through August, down 38.5% from a year ago. It’s highly unlikely that 2018 will post a new ETF sales record.
3) Principal to Launch First-of-its-kind Chat Feature for Retirement Plan Sponsors Principal | 9/18/2018
Because… In today's world of instant gratification, live chat is a great communication option to improve service quality as people do not like to be put on hold or wait for an email response. It can easily show links to various web pages and also helps in situations where people prefer texting to talking. Some chat applications even come with analytical and reporting capabilities for further customer service evaluation. However, asset management firms have largely been unable to leverage the advantages of this digital tool. When providing online chat, firms should try to avoid canned responses and ensure service representatives receive adequate training on how to fully understand questions and offer the most relevant solutions.