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UBS Asset Management and Morningstar Collaboration in the Defined Contribution Market Passes Milestone
UBS target-date collective investment trusts based on Morningstar Indexes attract two large clients, $2.4 billion in first six months.
NEW YORK, NY — UBS Asset Management Trust Company (UBS) and Morningstar, Inc. (Morningstar) today announced that their collaboration in the defined contribution market had passed a milestone. UBS's series of target-date collective investment trust funds (CITs) that seek to track the performance of the Morningstar® Lifetime Allocation Indexes attracted two large corporate defined contribution plan clients in their first six months, gathering $2.4 billion in assets. UBS launched the CITs, which are for use exclusively by qualified retirement plans, in July, 2015. Morningstar Investment Management LLC, a registered investment advisor and part of the Morningstar Investment Management group, serves as a nondiscretionary subadvisor with respect to the CITs. Morningstar, Inc. is the index provider.
"Our joint effort with Morningstar provides defined contribution plans and participants with a truly unique way to invest intelligently for retirement, and beyond," said Blake Moore, Head of Americas for UBS Asset Management. "And in addition to our first two large corporate plan clients, we have generated significant interest in these CITs based on Morningstar's indexes and glide path, and UBS's deep experience managing passive investment strategies."
Available in three series—conservative, moderate, and growth—the CITs are passively managed, low-cost investment selections. UBS licenses the Morningstar Lifetime Allocation family of indexes as the benchmarks for the CITs. Launched in 2009, the Morningstar Lifetime Allocation Indexes comprise three series of target-date indexes that vary in aggressiveness and adjust their asset allocations over time to become more conservative. The indexes leverage Morningstar’s Total Wealth Approach to investing—a concept that goes beyond looking at an individual’s current wealth, and takes into account his or her personal prospects, goals, and resources when building portfolios. The Morningstar Investment Management group developed this proprietary investment methodology through years of award-winning academic research on capital market assumptions, lifetime finance, and advanced asset allocation optimization techniques.
“Many people don’t think of themselves as investors. But the reality is they become one when they join their employer’s retirement plan. The result is a large population of ‘accidental’ investors who may not have the time, interest, or knowledge to invest, but need to do so to prepare for retirement,” Brock Johnson, head of workplace solutions for Morningstar, said. “The UBS CITs can offer an easy, low-cost, and appropriate solution for investors to help them build long-term wealth and reach financial independence.”
Not FDIC Insured | May Lose Value | No Bank Guarantee
The Morningstar Lifetime Index Funds are collective investment trust funds established under the UBS (US) Group Trust. UBS Global Asset Management Trust Company is the trustee the UBS (US) Group Trust and the investment manager of the CITs.
The values of the CITs will fluctuate up to and after their target dates. There is no guarantee the CITs will provide adequate income at or through retirement. There is no guarantee that the CITs will actually achieve any objectives, performance expectations, risk or return targets. Diversification and asset allocation strategies do not ensure a profit and cannot protect against losses in a declining market. The CITs are subject to various risks, including possible loss of principal, market volatility, risks associated with the underlying investments, exposure to international and emerging markets, small company and sector equity securities, commodities, and fixed income securities subject to changes in inflation, interest rates, market valuations, liquidity, prepayments, and early redemption.
The CITs are available for investment only by eligible retirement plans and entities. The CITs are not insured by the FDIC or any other governmental agency; are not deposits or other obligations of, and are not guaranteed by UBS Global Asset Management Trust Company or any of its affiliates. The CITs are not mutual funds and are not registered under the Investment Company Act of 1940 (the "1940 Act"), and their units are not registered under the Securities Act of 1933, or applicable securities laws of any state or other jurisdiction. CIT unitholders are not entitled to the protections of the 1940 Act. The decision to invest in the CITs should be carefully considered. The CITs are not sold by prospectus and are not available for investment by the public; CIT unit prices are not quoted in newspapers.
Notes to Editors
About UBS Asset Management
UBS Asset Management Trust Company is a wholly-owned subsidiary of UBS Group AG (UBS Group) and a member of the UBS Asset Management division. Asset Management is a large-scale asset manager with well diversified businesses across regions and client segments. It serves third-party institutional and wholesale clients, as well as clients of UBS’s wealth management businesses with a broad range of investment capabilities and styles across all major traditional and alternative asset classes. Complementing the investment offering, the fund services unit provides fund administration services for UBS and third-party funds.
UBS is committed to providing wealthy, institutional and corporate clients worldwide, as well as private clients in Switzerland, with superior financial advice and solutions while generating attractive and sustainable returns for shareholders. Its strategy centers on its Wealth Management and Wealth Management Americas businesses and its leading universal bank in Switzerland, complemented by its Asset Management business and its Investment Bank. These businesses share three key characteristics: they benefit from a strong competitive position in their targeted markets, are capital-efficient, and offer a superior structural growth and profitability outlook. UBS's strategy builds on the strengths of all of its businesses and focuses its efforts on areas in which it excels, while seeking to capitalize on the compelling growth prospects in the businesses and regions in which it operates. Capital strength is the foundation of its success.
About Morningstar, Inc. and the Morningstar Investment Management Group
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. Morningstar provides data on approximately 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 15 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services. The company has operations in 27 countries.
The Morningstar Investment Management group, through its investment advisory units, creates custom investment solutions that combine award-winning research and global resources with proprietary Morningstar data. With approximately $170 billion in assets under advisement and management as of September 30, 2015, the Investment Management group provides comprehensive retirement, investment advisory, and portfolio management services for financial institutions, plan sponsors, and financial advisors around the world. Morningstar Investment Management LLC is part of the Investment Management group and a wholly owned subsidiary of Morningstar, Inc.
Gregg Rosenberg, 212-713-8842
Alexa Auerbach, 312-696-6481