DCIO Resources Big as a Bank, Agile as an Advisor

Selecting a low-cost index fund generates meaningful savings. For strategies with comparably low fees, better tracking may lead to additional inherent cost savings beyond the IM fee.

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Difference between the highest (14bps) and lowest (7bps) reported Commingled Fund fees for the 10 largest managers in the eVestment ACWI ex-US Passive Equity universe, as of 9/30/18, assuming a $250M allocation.

Selecting a low-cost index fund generates meaningful savings. For strategies with comparably low fees, better tracking may lead to additional inherent cost savings beyond the IM fee.

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Difference between the highest (14bps) and lowest (7bps) reported Commingled Fund fees for the 10 largest managers in the eVestment ACWI ex-US Passive Equity universe, as of 9/30/18, assuming a $250M allocation.

Securities lending can potentially enhance returns. The risks, potential returns and cost structure of the program should be transparent and well understood by the plan sponsor.

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Average historical lending returns paid to the fund in the State Street MSCI ACWI ex USA IMI Index ERISA DC strategy from 2014-2017.

ERISA-qualified CITs pay a lower tax rate on dividends than mutual funds in many developed countries. This leads to material and consistent performance advantages.

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MSCI Index Data, published ERISA and RIC Tax Rates, as of 12/31/2017.

Asset managers with scale and efficient CIT fund structures can generate meaningful cost savings for end investors via internal crossing, translating into better long-term returns. 

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Estimated cost savings from In-kind/Internal Crossing/Unit Crossing activity in the State Street Global All Cap Equity Ex U.S. Index Fund from January 2012 – October 2018.