Video: Measuring Plan Investment Success
In this video clip from the Asset TV Masterclass Best Practices for Defined Contribution Plan Design, American Funds senior retirement strategist John Doyle discusses how to measure investment success for a defined contribution plan:
John Doyle: “ … You look at the 50% or more that are investing on their own and look at their personalized rate of return. So don’t look at the investments underneath, look at the personalized rate of return of each individual. So one of the things that I think if you’re trying to measure the success from an investment point of view, is you should compare the individuals who are managing money on their own to their appropriate target date fund or QDIA, as the benchmark. And it doesn’t mean that many are investing more conservatively because they have legitimate reasons to, or more aggressively. But if you’re using it as a benchmark and trying to define, am I being successful in pushing my employees towards retirement. It gives you a different type of benchmark on the investment front than you may normally have had if you were just looking at each individual investment.”
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the mutual fund prospectuses and summary prospectuses, which can be obtained from a financial professional, and should be read carefully before investing. Similar information about collective investment trusts can be obtained from Capital Group or participants’ plan provider or employer.
Content contained herein is not intended to serve as impartial investment or fiduciary advice. The content has been developed by Capital Group, which receives fees for managing, distributing and/or servicing its investments.
Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation.