Callan GlidePath Funds Weather Volatile Market; Firm Ranked Top Performing Manager for Collective Trusts

SAN FRANCISCO--(BUSINESS WIRE)-- After reaching their three-year anniversary in September, the Callan GlidePath® target date fund series earned Callan’s Trust Advisory Group (TAG) another milestone—according to data compiled by Morningstar—each of the funds in the series ranked in the top 10 relative to its Collective Investment Trust peer group for the year ended September 30, 2010.¹

Callan believes the consistent outperformance across the fund series is attributable to several key factors including the diversification of the funds’ investment lineup, the utilization of top managers, competitive fees, and the use of innovative strategies including direct real estate and stable income.

Launched in 2007, the Callan GlidePath® Funds use a “best-of-breed” open-architecture approach similar to that employed by large institutional defined benefit plans. TAG oversees nine separate fund managers that specialize in areas as diverse as small cap equities and Treasury inflation-protected securities. The Collective Investment Trust allows for lower fees and grants TAG greater flexibility to invest their funds in a range of strategies usually employed by large institutions—and until recently, were unavailable to defined contribution participants limited to 40-Act mutual funds.²

“After nearly 40 years in the institutional investment consulting business working with some of the country’s largest retirement funds, we were confident that building a series of funds based on an open-architecture structure was the best strategy for sponsors and their plan participants over the long-term,” said Kelly Cliff, CIO of Public Markets, Callan Associates. “Although we launched the series on the brink of the market crisis, our funds performed admirably during the downturn, and our commitment to disciplined rebalancing allowed them to lead the way during the recovery.”

“As the US savings model becomes increasingly dependent on defined contribution plans, we have an obligation as an industry to do everything we can to bring our best practices to bear on the performance of individual retirement accounts,” observes Gregory Allen, president of Callan Associates. Allen also noted that target date mutual funds managed by a single provider were a good first step because they provided diversification, automatic rebalancing and built-in risk management. Open architecture is the next logical step.

“Open architecture expands the investment opportunity set, increases diversification, forces managers to compete in every category on fees and performance, and allows individual investors to enjoy more of the benefits that most large institutions have taken for granted for decades,” said Allen.

The Callan GlidePath® Funds are now utilized by over 75 distinct retirement plans and recently surpassed $100 million in total assets. The funds are issued in five year increments, 2005 through 2050, and in 2012 Callan plans to add a 2055 fund. Wilmington Trust is the bank sponsor and trustee of the Callan GlidePath® Funds.

For more information on the Callan GlidePath® Funds, contact Kelly Cliff at (415) 974-5060 or [email protected].

About Callan Associates

Founded in 1973, Callan Associates is one of the largest independently-owned investment consulting firms in the country. Headquartered in San Francisco, Calif., the firm provides research, education, decision support and advice to a broad array of institutional investors through five distinct lines of business. The Trust Advisory Group is the asset management division that specializes in the design, implementation and on-going management of multi-manager portfolios for institutional investors. TAG applies a process-driven approach to building efficient, low cost portfolios with clearly articulated goals and objectives. TAG serves as the sponsor and advisor to a multi-manager small cap equity fund and as the non-discretionary advisor to a series of Target Maturity Funds known as the Callan GlidePath^® Funds. For more information, visit www.callan.com.

Notes:

1. Data compiled by Morningstar appeared in Pensions & Investments “Top performing managers by category: collective investment trusts” on November 15, 2010. Callan GlidePath Funds: 2010, 2015, 2020, 2025, 2030, 2035, 2040, 2045.

2. 40-Act mutual funds: The Investment Company Act of 1940, a federal law that was enacted by Congress in 1940, requires companies that market pooled investment funds to the public to register as investment companies with the Securities and Exchange Commission. The Act also sets standards for disclosure of financial information, pricing of shares offered to the public and allocation of portfolio investments, and prohibits a regulated investment company from changing its policies without shareholder approval.

Callan AssociatesNancy Malinowski, 415-274-3011
[email protected]

Source: Callan Associates