The goal of index investing is to enable plan sponsors to implement retirement portfolios
with appropriate risk exposures to match risk capacity. As such, index investing
may be a sound way to uphold the fiduciary standard and help participants achieve
their retirement objectives. This concept is articulated in the Uniform Prudent
Investor Act ("UPIA"), adopted in 1992 by the American Law Institute's Third Restatement
of the Law of Trusts. IFA's index investing strategy may help plan sponsors fulfill
the requirements set forth in the UPIA.
The larger the capacity for risk, the greater the expected returns. Expected returns
are explained by Risk Capacity because capacity is directly linked to proper risk
exposure, also referred to as asset allocation or investment policy. What’s your
Risk Capacity? Find
out right now when you take the simple 5-minute survey. It will lead you to one
of the 10 IFA Index Portfolios IFA has built for 401(k) plans.
IFA's Index Portfolios employ the use of 15 unique IFA Indexes to accomplish the
important goal of risk-appropriate global diversification. Higher-risk Index Portfolios
are comprised primarily of equities, while lower numbered Index Portfolios have
higher percentage allocations to fixed income. Investors buy, hold and rebalance
these Index Portfolios, with the goal to achieve global diversification and risk-appropriate
allocations in up to 12,000 securities in as many as 40 different countries.
These investments provide transparency and a cost-effective, risk-appropriate
way to invest for retirement.