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Journey Spring/Summer 2010 Issue 4

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SPRING/SUMMER 2010 – ISSUE 4 Architects say that “God is in the details.”* And anyone who has indulged in discount Swedish design at IKEA or a Lego kit knows the value of detailed instructions and the importance of adhering to them without exception.

Fund line-ups, too, require a careful precision. Style drift, securities overlap, underperformance, manager changes and objectives resetting, plus a handful of additional criteria, can gang up on a plan sponsor to render the investment offering much less than an Investment Policy Statement would propose.

For many employers, the challenge of maintaining a laser-like focus on the fund offering is a matter of time. The popular term of ‘not enough bandwidth’ reminds us of the need to prioritize. “Investments are integral to the plan,” explains CEO of J.P. Morgan Retirement Plan Services, Pam Popp, in the following pages. We underscore the importance of this sentiment; indeed, the investment line-up is the plan, certainly its heart and soul. Making sure that participants have a range of appropriate choices in terms of asset classes, styles and capitalizations is how a diversified and long-term DC portfolio is birthed.

In this issue of Journey, we focus on investments and fund line-ups in particular. First and foremost, we talked with clients. Their insights and experiences in the investment space come across in a roundtable discussion featured on page 11. Complementing the client discussion is our center spread, “Day in the Life,” in which we shadowed a J.P. Morgan investment strategist as she worked with clients to review fund line-ups and consider adjustments and met with fund managers offering their investment services.

We sat with Dr. David Kelly, Chief Market Strategist at J.P. Morgan Funds and frequent CNBC guest, to discuss prospects for the U.S. economy and America’s shifting demographics and retirement savings plans. To develop the conversation around investments, we examined global investing and profiled the BRICs. We are pleased to share the executive perspective of George Gatch, CEO of J.P. Morgan Funds, and as with previous issues, we include statistics, letters from the field, and our legislative anchor, Bob Holcomb.

While there is no detailed instruction manual, we hope the topics and insights in this magazine help guide you toward a better solution.

* Ludwig Mies van der Rohe, German-born architect and designer

	A Word Pamela Popp, CEO of J.P. Morgan Retirement Plan Services talks about 'Topic A' for plan sponsors.
	Speaking Investments Exploring Inflation and the Global Outlook.
	Executive Perspective George C. W. Gatch, CEO of J.P. Morgan Funds, highlights key issues on the minds of institutional investors.
	Legislative Corner A quick look at benefit plans and deflation, pushing back retirement and an update on pension funding relief.
	Plan Sponsor Roundtable Sit table-side as several plan sponsors discuss investment line-ups and the critical issues in building a plan that help create successful outcomes for their employees.
	Day in the Life Journey follows investment strategist Diane Minardi-Stone as she works with plan sponsors and fund companies to identify, build and monitor optimal fund choices and line-ups.
	On the Mend: Older, but Wiser? David Kelly, Chief Market Strategist at J.P. Morgan Funds Reading the tea leaves on the prospects for the U.S. economy, America’s shifting demographics and retirement savings plans.
	Building Blocks A blueprint for adding direct real estate to your DC plan.
	DC: The Next Chapter David Musto, Managing Director, Head of J.P. Morgan’s DC Investment Solutions Business, speaks to Journey about the recent transformation of the retirement landscape.
	Outside the (Stable Value) Box Innovative alternatives for traditional stable value funds.

This document is intended solely to report on various investment views held by J.P. Morgan Asset Management. Opinions, estimates, forecasts, and statements of financial market trends that are based on current market conditions constitute our judgment and are subject to change without notice. We believe the information provided here is reliable but should not be assumed to be accurate or complete. The views and strategies described may not be suitable for all investors. References to asset classes and financial markets are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations. Indices do not include fees or operating expenses and are not available for actual investment. The information contained herein may employ proprietary projections of expected returns as well as estimates of their future volatility. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. Discussions presented should not be construed as legal opinions or advice. You should consult your own attorney, accountant, financial or tax advisor or other planner or consultant with regard to your own situation or that of any entity which you represent or advise. Past performance is no guarantee of future results.

J.P. Morgan Asset Management is the marketing name for the asset management business of JPMorgan Chase & Co., and its affiliates world wide.

IRS Circular 230 Disclosure: JPMorgan Chase & Co. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with JPMorgan Chase & Co. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.