CFDD 2014 Advisor Conference


Quarterly TDFs Commentary

6/30/14-Combining “to” and “through” TDFs for all vintages, the average TDF earned 4% for the quarter and 17% for the trailing year. The S&P 500 earned 5% for the quarter and 25% for the trailing year while the BarCap US Agg Bond Index gained 2.0 % for the quarter and 4.4% for the year. The average 2015 TDF earned about 11% for the trailing year while the average 2045 TDF earned about 17%. The six percentage point vintage spread was down from last year’s twelve percentage points. The trailing year spread between the best and worst performing individual TDF was eight percentage points for the 2015 vintage and seven percentage points for the 2045 vintage, decreasing by almost 50% from last year. The average all vintage TDF underperformed the S&P 500 by 7.6 percentage points for the trailing year, much improved from last year’s 16.5 percentage point underperformance. Risk across most asset class remains historically low and while they have regained some ground, broadly diversified TDF strategies have yet to prove their mettle.

CFDD 2014 Advisor Conference

Quarterly Asset Class Commentary

6/30/14-Fueled by increasing confidence in a global recovery, positive domestic indicators and continued monetary accommodation, the US and other developed equity market categories experienced mid-single digit gains during the second quarter. For the trailing quarter, year- to-date and year ending 6/30/14, the unloved and low volatility S&P 500 was up 5%, 7% and 25% respectively. Large cap and value styles were favored. Following a strong first quarter, real estate securities gained 7% during the second quarter. Utilities and energy were the most favored sectors. Led by India, emerging markets outperformed developed markets during the quarter. Numerous return from the dead type markets, particularly those in Europe, have significantly outperformed the S&P 500 during the trailing year. Long duration bonds benefited from declining rates with high yield and TIPS outperforming other sectors. The 10-Yr Treasury ended the quarter with yields around 2.5%, down from the second quarter’s 2.7% and 3.0% at year-end.

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