Brinker Capital this week became the latest independent investment management firm to add a suite of exchange-traded funds (ETFs) to its defined contribution retirement plan offering, adding seven new ETFs that range from defensive fixed-income funds to aggressive equity-based funds.
The Berwyn, Pa.-based company said the decision to add ETFs to its DC mix is designed to "provide plan participants with additional means of achieving their financial goals by capitalizing on the benefits of active, as well as passive, portfolio management."
"Over the past several years, ETFs have become one of the fastest-growing segments of the asset management industry and are an increasingly popular investment vehicle for both professional and retail investors," Brinker Capital President John Coyne said in a statement.
"Despite this popularity, not many retirement plan managers have figured out a way to incorporate ETFs into 401(k) plans because of trading complexities," he added. "After years of research and a technology build-out, we’re pleased to be offering these investment vehicles in our defined contribution plans.”
Brinker Capital will be offering the ETFs in collaboration with their record-keeper, Professional Capital Services, LLC/
Company officials said the income stream of each ETF retirement strategy depends on each investor’s risk tolerance and time horizon. However, it said, all models are designed to offer consistent, competitive performance, while seeking to achieve better risk-adjusted returns over the long term.
Asset allocation within each portfolio is divided into fixed income, real assets, absolute returns, domestic equity, private equity and international equity. Exposure to alternative investments is directly related to investor risk tolerance.
Mutual funds will be used where appropriate ETFs are not available or where active management has a significant competitive advantage.