Chartwell Views

We invite you to review some of the articles written by Chartwell professionals on specific investment topics of interest to current clients. 


The most significant piece of retirement legislation in more than a decade, the SECURE (Setting Every Community Up for Retirement Enhancement) Act was signed into law on December 19, 2019.  Many of the changes focus on defined contribution plans, but a number of provisions also affect defined benefit plans, IRAs and 529 plans.  This Chartwell Views piece summarizes the most significant SECURE ACT changes. Many of the provisions of the SECURE Act became effective as of the date the Act was signed into law.  Implementation of other provisions are dependent up the start of the plan’s year, or the employer’s tax year beginning after December 31, 2019.   Recordkeepers/administrators are working on updating their systems to incorporate changes and are reaching out to clients to make them aware of the impact it will have on plans.  Plan sponsors should meet with their recordkeepers/administrators to specifically review the impact the Act will have on their plans and amending plan documents accordingly.

The SECURE Act (pdf)


Demystifying ESG & Responsible Investing

Investors today are giving greater thought to how they can align their investments with their values. With the array of acronyms (ESG, RI, SRI, BRI) and terminology (impact investing, green investing) out there, this space can be confusing to navigate. This paper seeks to discuss the history and evolution of the ESG/Responsible Investing space, clarify the three main approaches to investing within this space (SRI, ESG Integration, and Impact Investing), and help the plan sponsor decide which approach is best suited for their plan.

Demystifying ESG and Responsible Investing (pdf)


Exploring Global Real Estate Indices


Selecting an appropriate internal benchmark is a challenge for active and passive managers, and their investors. Investment strategies within the same asset class can differ considerably in terms of market capitalization ranges, sector and/or country allocation, and other metrics (profitability, earnings, quality/investment grades). Additionally, the number of indices has multiplied in recent years, providing each asset class with numerous benchmarking options. It is important for managers to select benchmarks which most closely represent (or correlate) with their portfolios and for investors to use appropriate benchmarks for performance evaluation purposes. 

Exploring Global Real Estate Indices (pdf)



Annually, PLANSPONSOR magazine conducts a survey of the US defined contribution plan marketplace.  In 2018, surveys were sent out to plans of all sizes covering a variety of industries, as well as nonprofit organizations (4,000 responses were received).   Chartwell Consulting has prepared a summary of the survey findings for the past 10 years.   Detailed summary results can be found on pages 4-7, along with comparisons to the prior year’s survey.   Highlights of the survey findings are provided on pages 1-3.  In the past two years, the survey has added more questions on plan costs, fees and fee structures, health savings accounts and financial wellness programs (see page 3).  Many of you have asked “what are other plans doing” and we hope sharing these industry trends is useful to you in structuring and managing your defined contribution plans.   

Chartwell VIEWS_2018 DC Survey (pdf)


Bear Market Perspectives


Equity markets closed 2018 with one of the weakest months of December on record.  From its high on September 20th, the S&P 500 touched on bear market territory (a decline of 20%) December 24th.  From that point, the market’s rebound/rally/bounce (time will tell which one we are in the midst of!) has been as swift and stunning as the decline.   As we wrote our 4th quarter Chartwell Review and prepare for year-end meetings, we collected some research on bear markets that might provide some reassuring perspective.

Bear Market Perspectives January 2019 (pdf)


Small Cap Indices Are Not Created Equal

As we have conducted index fund searches, we have been intrigued by the different performance outcomes we were finding amongst funds within the same asset class.  The differences were observable across all capitalization ranges and styles, but are most prominent in small cap equities.   What would cause a 2%-4% difference in the trailing annual returns for small cap index funds?   We wrote the attached paper to share our research on the topic.   Understanding the differences in the indices helps in both the selection of an appropriate index fund, and in appropriately benchmarking passive and active funds.  (September 2018)

Small Cap Indices are Not Created Equal (pdf)



Each year, Chartwell Consulting provides a summary of the  PLANSPONSOR’s Defined Contribution Plan survey.  The broad survey covers  3.400+ DC plans, across all industries and plan sizes. The survey covers many areas of the  defined contribution plan market, including: plan types and design  features, “auto” features, participation and employer match, loans, plan investments and  fees, and fees and expenses. In this year’s survey, plan leakage was an  expanded topic, with many more questions on loans (how many are allowed, can loans be taken  on ROTH balances, can separated employees continue to make loan  payments).  (March 2018)

2017_PLANSPONSOR_DC_Survey_Summary (pdf)


Effect of the Trump Election on Global Markets

During the fourth quarter of 2016, there was much discussion on  the impact the Trump presidential election had on markets. As we  researched and reviewed the quarter for our Chartwell Review and client reporting, we took a  look at global equity and bond market returns pre-election  (January-October 2016) and post-election (November-December 2016). The results of our  analysis are summarized in the attached two graphs–showing a picture  is worth a 1000 words! (February 2017)

Effect_of_Trump_Presidency_on_Market_Returns-2016 (pdf)


Understanding Real Estate

Our  recently-completed strategic asset allocation work has pointed in the direction of "efficient  frontier" asset mixes with as much as 15-17% allocated to real estate,  depending on the specific policy objectives and risk tolerances of individual clients. The  rationale for this is a function of the attractive relationship of  current real estate income  returns compared to high-quality bond income returns, the moderate  inflation hedge provided by real estate revenues, and the resulting  potential for modest capital appreciation potential - compared to almost none for  high-quality term bonds. To address this issue, we have written this  white paper to help develop a  better baseline understanding of the overall investable real  estate marketplace, including its structural elements. (June 2016)

Understanding_Real_Estate_2016 (pdf)


Liability-Driven Investing

As  defined benefit plan sponsors consider investment strategies, an increasing  element of that talk is about "de-risking" the plan. These discussions  almost inevitably swing to whether adopting a Liability-Driven Investment (LDI) Strategy is  in the plan sponsor's best interest. An LDI strategy re-orders asset  investment priorities, stating objectives first in terms of under/overperformance  relative to plan liabilities. This article addresses the basic LDI  issues, and provides a framework for beginning to develop and implement an LDI strategy. (February 2016)

Chartwell_Views_Liability-Driven_Investing (pdf)


The Bipartisan Budget Act of 2015

On  November 2, 2015, the Bipartisan Budget Act of 2015 was signed into law. The legislation  includes three provisions that impact single-employer defined benefit  plans. This white paper reviews those provisions, their implications and potential plan  sponsor actions. (February 2016)

Chartwell_Views_12Feb2016 (pdf)


May You Live in Interesting Times

During the past few weeks, we have experienced  significant market volatility globally and across all risk asset  classes. The attached        Chartwell Views provides our perspective on the probable  causes for the volatility, thoughts on what your committees can do, and  how we can assist you to “work the problem.” (September 2015)

Chartwell_Views_02Sep2015 (pdf)


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