Relájate (Relax), the UnifiedPlan was Designed for This!

The term relájate (pronounced: rreh-lah-ha-tay) is a Spanish command which, calmly, implores you to relax. It’s a word I came to know while living in the laidback Yucatan peninsula of Mexico over a decade ago. It is as much a mindset as a word. It is linguistically efficient and phonetically cathartic. When you say it, you feel its meaning.

animated image saying Relajate Just Relax

This is a feeling participants in Unified Trust’s UnifiedPlan® Managed Account Solution, can embrace.

As the first quarter of 2020 comes to an end, the Dow Jones Industrial Average (DJIA) is headed toward its worst quarterly performance in history. The UnifiedPlan models and glidepaths, however, are headed toward their best quarter of relative performance in the program’s history.

image saying The UnifiedPlan Models and Glidepaths are headed toward their best quarter of relative performance in their history

As of March 27, the UnifiedPlan significantly outperformed its target-date fund peers year to date. The UnifiedPlan M14 portfolio (14 years from retirement, Moderate glidepath), a 60% equity and 40% fixed income allocation, returned -15.9% versus an average target-date fund return of -19.2%. This represents UnifiedPlan outperformance of 3.3%. Participants closer to retirement fared even better when they needed to most. For the same time period, participants in the UnifiedPlan M4 portfolio outperformed their target-date fund peers by 4.5% (-10.4% vs. -14.9%, respectively).

image saying  Robo Advisors - UnifiedPlan models also performed very well relative to robo advisors

Independent robo advisor benchmarking firm, Backend Benchmarking, reports that as of March 27, average year to date performance of their robo universe was about -18.5% for a 60% equity and 40% fixed income portfolio. This represents outperformance of a similar UnifiedPlan model allocation of 2.6% versus the robo universe year to date.

The primary objectives of the UnifiedPlan managed account program are to help participants retire successfully and to get them to their goal with the least amount of risk necessary. We accomplish this by defining a retirement income goal for each participant and managing three key crisis risks:

  • Factor Risk – the risk of placing excessive bets on risky assets. Every retirement plan on the UnifiedPlan platform receives a Benefit Policy Statement that sets the parameters for their UnifiedPlan experience. This governing document sets clear guidelines at a policy level for how much risk a participant may be exposed to, putting the outcome and risk posture of the participant ahead of the performance of the investment manager.
  • Sequence Risk – the risk of experiencing significant losses either right before or right after retiring. The Unified Trust Wealth Preservation strategies seek to reduce volatility and preserve capital. These funds offer significant advantages to participants who are nearing retirement because they are built to protect against sizeable losses during severe market downturns.
  • Diversification Risk – the risk of taking unnecessary market risk by not investing in a portfolio of diversified investments. Unified Trust heavily utilizes the stable value asset class in its retirement plan and UnifiedPlan models. Stable value investments offer a guaranteed rate of return with very little investment risk (as measured by standard deviation of returns). This asset class anchors portfolio returns and greatly diminishes portfolio volatility, two hallmarks of excellent portfolio diversification.

animated image saying The UnifiedPlan helps participants retire successfully and with the least amount of risk necessary

By designing the UnifiedPlan as a Qualified Default Investment Alternative (QDIA) from inception, the platform enjoys an unrivaled participant adoption rate of 85%.

This means the vast majority of participants are directly benefiting from the thoughtful design and on-going stewardship of the UnifiedPlan.

As a discretionary trustee, this focus on improving outcomes and placing the interests of participants and beneficiaries first is the policy of Unified Trust today, just as it was declared policy in the original preamble to ERISA back in 1974.

We take great pride in this commitment to clients and it is our sincere wish that even in these turbulent times, you may heed our humble request to relájate.

animated image saying  Relajate Relax - The UnifiedPlan was designed for this

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