F-Squared Investments Unveils New Perspectives on Managing Risk and Volatility in 401(k) Retirement Accounts

WELLESLEY, Mass., April 7, 2014 /PRNewswire/ -- F-Squared Investments announced today it has published an important white paper on how plan fiduciaries of 401(k) and other retirement plans can address growing participant concerns about market risk and volatility in their retirement savings accounts. The paper, "Reducing Volatility in Defined Contribution Plans: The Fiduciary Considerations of Incorporating Downside Risk Management," was written in conjunction with former Assistant Secretary of Labor, Bradford Campbell and addresses, in particular, the significant losses that can occur during market crashes.

A copy of the paper can be viewed online here.

Driven by heavy losses during the financial crisis, retirement account participants are increasingly nervous about the amount of market risk in their accounts, especially because of today's equity market valuations and changing interest rate environment. In an attempt to respond to these concerns, more and more plan sponsors are introducing strategies designed to better protect their plan's investments against the risk of significant market declines.

The white paper explains how plan fiduciaries can incorporate new defensive strategies into their menu of investment options in order to better meet the needs of their participants.  It also provides guidance on considerations that plan fiduciaries need to be mindful of while incorporating these alternative strategies.

"Plan Sponsors saw their investment menus and target date funds fail to protect participants from the significant market decline that occurred in 2008-2009," said Paul Gamble, Managing Director, Head of F-Squared Institutional and Retirement. "With uncertainty rising, we believe plan sponsors are looking for ways to reduce the volatility and risk that exists in traditional plan investment menus – downside risk managed investments may be the answer for them. This paper is designed to educate advisors and fiduciaries who are looking for ways to incorporate these types of investments into their plans."

The paper discusses what downside risk managed investments are, why a plan sponsor may consider adding them, and some of the factors they should evaluate when deciding to do so. It aims to serve as a resource for those plan fiduciaries that want to better manage risk in their defined contribution plan investment menus.

About F-Squared Investments
F-Squared Investments is a manufacturer of next-generation investment indexes based on its AlphaSector® and Portfolio Replication Technology capabilities, F-Squared seeks to deliver repeatable investment processes and solutions to help meet the financial goals of real investors. The firm's core values center on striving to protect investors from significant down markets by actively de-risking, while participating in rising markets. F-Squared serves clients in the advisor, institutional, retail and retirement markets.  As of December 31, 2013, F-Squared affiliated entities had over $20 Billion in fee-generating assets.  F-Squared Investments is based in Wellesley MA and Princeton NJ. 

www.f-squaredinvestments.com

About Bradford Campbell
Bradford P. Campbell is a nationally recognized figure in employer-sponsored retirement plans. From 2006 to 2009, he served as the Assistant Secretary of Labor for Employee Benefits, the head of the Employee Benefits Security Administration (EBSA).  As ERISA's former "top cop" and primary federal regulator, Mr. Campbell serves as ERISA counsel for Drinker Biddle & Reath, LLP, one of the nation's largest ERISA law firms.

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SOURCE F-Squared Investments