Preferred Trust
Our Preferred Trust platform is composed of more than 180 collective
investment funds that represent diversity and depth within each asset
class, as well as the full spectrum of investment styles.* Our clients
can choose their investment offerings from an extensive list of
independent money manager funds and well-known mutual funds, as well as
exchange-traded funds (ETFs) and lifestyle asset allocation funds, to satisfy
plan fiduciary requirements.
Both our money manager funds and mutual funds are collective
investment funds. These collective investment funds are trust funds
sponsored by a bank or trust company (i.e. First Mercantile) that pools
contributions of participants of qualified retirement plans.
Exchange-traded funds (ETFs) offer investors who prefer a passive
approach to investing a lower cost means of gaining market exposure.
First Mercantile offers a number of ETFs on its Preferred Trust
platform, some which strive to replicate the performance of broad market
indices while others strive to replicate the performance of particular
sectors of an index.
Each plan can offer a range of up to 25 investment options to create
a well-designed program to help each participant construct a broadly
diversified portfolio that is consistent with his/her own personal risk
tolerance. We also offer clients the flexibility to create customized
asset allocation models for each retirement plan.
Visit one of the following links for more information on:
Our Investment
Management Team
Our Due Diligence Process
Our Monitoring Process
Our Investment Management Team
Our investment management team consists of two components: the
Advisor Review Committee (ARC) and
our Investment Analytics Group. The ARC, composed of business
leaders and financial experts, is ultimately responsible for making sure
each money manager and mutual fund meets our strict performance standards. The
duties performed by our Investment Analytics Group include the day-to-day
evaluation of the investment offerings, money manager and mutual fund
searches, written commentary and in-depth fund analysis and the
development of plan-specific reports.
Back To Top
Our Due Diligence Process
The Advisor Review Committee conducts a
stringent search and due diligence process for each money manager and
mutual fund, selecting only the top performing funds that meets its
strict criteria. Our due diligence process requires that each fund pass
an initial quantitative screening process and further analysis. Factors
that may be evaluated include, but are not limited to:
- Solid performance in good and bad markets.
- Performance superior to
established benchmarks.
- Consistency in maintaining a stated investment
strategy.
- Ability to meet our objectives.
Back To Top
Our Monitoring Process
Once approved for inclusion on our investment
platform, each money manager and mutual fund is reviewed on an ongoing
basis regarding:
- Consistency of style within its stated investment policies.
- Changes in
the personnel, process, firm management and ownership.
- Fund performance
in relation to its stated benchmark and peer universe.
When reviewing each fund, the ARC may determine that a money manager
or mutual fund warrants closer scrutiny for one of the above reasons.
The fund is then placed on the quarterly ARC Watch List. If the ARC
decides to change the fund, we communicate that change to the client.
The client can decide whether or not to use the replacement fund
recommended by the ARC or choose another fund on the platform. Funds are
replaced with another fund in the same asset class so that a plan is
able to maintain its array of investment options offered.
Back To Top
* There is no guarantee that any fund will achieve its stated objective.
Investment in a fund involves risk, including the possible loss of
capital. Investment in a fund is not a deposit and neither the FDIC nor
any other agency insures any fund.
|
