Featured Chart: Americans Say Retirement Saving Incentives Should Be a National Priority

By Sarah A. Holden

January 26, 2012

Stresses on the U.S. government budget have resulted in a reexamination of national priorities with respect to taxes and government spending. Against that backdrop, our survey of 3,000 U.S. households for our recent research report—America’s Commitment to Retirement Security: Investor Attitudes and Action—contained a new question. Households were asked: “Do you agree that continuing to provide incentives to encourage retirement saving should be a national priority?”

The response was clear. Eighty-four percent of U.S. households agreed that continuing these incentives should be a national priority. Agreement was higher (88 percent) among households owning defined contribution (DC) accounts or individual retirement accounts (IRAs), but more than three-quarters of households without such retirement accounts agreed. Here’s how the survey numbers break down.

A Majority of Households Agree That Incentives for Retirement Savings Should Be a National Priority

Percentage of U.S. households by ownership status, fall 2011

Note: The sample is 2,968 households, of which 1,869 owned DC accounts or IRAs and 1,099 did not.

Source: ICI tabulation of GfK OmniTel survey data (November and December 2011)

In response to other questions, 85 percent of all U.S. households disagreed with the idea of eliminating the tax advantages of DC accounts, and 83 percent opposed any reduction in workers’ account contribution limits.

Households also indicated they appreciate many other features of DC plan savings, in addition to the tax incentives. A vast majority of households with DC accounts indicated that their plan offers a good lineup of investment options and that payroll deduction made it easier to save. Results from our recent survey of DC plan recordkeepers confirm this commitment to saving: in the first three quarters of 2011 only 2.2 percent of DC plan participants stopped contributing to their plans.

You can find the full report, along with other studies and related materials, at our 401(k) Resource Center.

Sarah A. Holden is ICI’s Senior Director of Retirement and Investor Research.

TOPICS: Retirement Research

Fund Investment in Commodities Provides Opportunity and Diversification for Investors

By Karen Lau Gibian and Rachel H. Graham

January 26, 2012

On Capitol Hill, a hearing at the Permanent Subcommittee on Investigations (PSI) raises questions about mutual fund investors’ ability to get commodity exposure in their portfolios and suggests the Internal Revenue Service (IRS) should no longer allow this type of investment.

ETF Basics: The Creation and Redemption Process and Why It Matters

By Mara Shreck and Shelly Antoniewicz

January 19, 2012

One benefit of exchange-traded funds (ETFs) is that they give investors access to a range of strategies and indexes, with the flexibility of transacting throughout the trading day at prices that typically approximate the value of the fund’s underlying portfolio. To see how ETFs accomplish this, one must understand how ETF shares are created and redeemed.

Read more…

TOPICS: Exchange-Traded Funds

ICI Registers Deep Concerns with the Volcker Rule Proposal

By Rachel H. Graham

January 18, 2012

The “Volcker Rule” provision in the Dodd-Frank Wall Street Reform and Consumer Protection Act was written to restrict banks from using their own resources to trade for purposes unrelated to serving clients. While the Volcker Rule was not directed at U.S. mutual funds and other registered investment companies, its proposed implementation raises deep concerns for the U.S. registered fund industry.

Volcker Rule Implementation Threatens Global Investment Funds and Their Shareholders

By Dan Waters

January 18, 2012

The proposed implementation of the so-called Volcker Rule has serious implications for global investment funds and their shareholders. Like our U.S.-based ICI colleagues, ICI Global has today voiced concerns about this rule in a statement to the U.S. House subcommittees examining how the rule will impact markets and investors.

Data Update: Money Market Funds and the Eurozone Debt Crisis

By Emily Gallagher and Chris Plantier

January 13, 2012

In October and December, we discussed how portfolio managers of U.S. prime money market funds have addressed the ongoing debt crisis in the eurozone. Here is a look at the latest monthly data on these funds’ holdings by home country of issuer. Holdings of French issuers continued to fall in December, and almost 80 percent of these French holdings are either short-dated collateralized repurchase agreements or other instruments that mature in seven days or less.

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