(Des Moines, Iowa) -Do-it-for-me lifecycle funds are proving to be a popular and effective way to save for retirement. The ultimate in automatic retirement savings, the Principal LifeTime Funds have achieved a five-year anniversary milestone marked by high demand, rapid growth and strong performance-with nearly 60 percent of plan sponsors now offering the target date portfolios to participants.
The professionally managed investment options from the Principal Financial Group ®, the
nation´s 401(k) leader* and total retirement solutions innovator-are tied to target retirement dates and automatically become more conservative as retirement approaches. Investors identify their year of retirement and the corresponding Principal LifeTime Fund allocates their assets accordingly. The simple, hands-off approach to retirement saving is skyrocketing in popularity as it helps investors bypass their own inertia and confusion.
"Employees are often overwhelmed by the number of decisions required to save effectively for retirement. As a result, many simply do nothing. Principal LifeTime Funds give ´do-it-for-me´ investors access to professional investment managers who make the complex asset allocation decisions for them. Investors can boost their savings levels while reducing their stress levels," said David Miles, executive vice president of The Principal ® family of mutual funds. "As a result, we´re seeing strong demand for the Principal LifeTime portfolios and we´re proud to have delivered five-years of strong returns to our clients. Amid the gloomy reports of retirement saving today, Principal LifeTime options offer a welcome glimmer of hope for millions of U.S. workers."
Available to both retirement plan participants and individual investors, the numbers generated by the Principal LifeTime Funds during their first five years signify a strong track record:
- 100 percent of Principal LifeTime Funds have outperformed their peer group median for the one-and five-year periods ending March 31, 2006.**
- Plan participation rates average 6.68 percent higher if the plan offers a "do-it-for-me" investment option like Principal Lifetime Funds.
- In just five years, assets under management in the Principal LifeTime Funds have grown to more than $4.5 billion. [1]
- Nearly 19,000 plan sponsors are offering the Principal LifeTime Funds to participants.
- Nearly 400,000 retirement plan participants are using Principal LifeTime options in their 401(k) or 403(b) plan.
- Outside of worksite retirement plans, 35,000 individual investors have selected Principal LifeTime investment options.
The Principal LifeTime Funds, which include Principal LifeTime 2010, 2020, 2030, 2040, 2050 and Principal LifeTime Strategic Income, are managed by Principal Management Corporation, the registered investment advisor of the Principal family of mutual funds and sub advised by Principal Global Investors, the asset management arm of the Principal Financial Group.
The Principal LifeTime portfolios are invested in the Principal Investors Funds, a series of mutual funds which also marked a recent five-year anniversary with strong growth. As of March 31, 2006, the Principal Investors Funds have grown to 55 funds and accumulated $28 billion in assets under management in their first five years. The funds are subadvised by 24 premiere investment managers selected and monitored by the Principal Due Diligence Program SM.
"With our strict process, we have been able to identify, hire and monitor expert investment managers who have delivered top tier performance," said Miles. "The strong five year track record of the Principal LifeTime options is a powerful demonstration of how our premiere process is working to the benefit of our clients."
About The Principal Financial Group
The Principal Financial Group (The Principal ®) [2] is a leader in offering businesses, individuals and institutional clients a wide range of financial products and services, including retirement and investment services, life and health insurance, and banking through its diverse family of financial services companies and national network of financial professionals. A member of the Fortune 500, the Principal Financial Group has $205.3 billion in assets under management [3]and serves some 16.0 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.
*The May 2005 "Bundled 401(k) Buyer's Guide" published by Treasury & Risk Management lists The Principal as the 401(k) leader based on the total number of plans administered.
** Principal LifeTime investment options outperform peer group medians when performance exceeds 50% of peers in their respective Morningstar categories. Analysis performed using Preferred share class of the Principal LifeTime Funds. Other share class performance may vary due to different expenses. For performance comparisons of all foundation funds, contact your representative of The Principal. Preferred share class is not available to retail investors.
Principal Investors Fund is distributed by Princor Financial Services Corporation, 800-247-4123, member SIPC. Securities are offered through Princor ® and/or independent broker/dealers. Securities sold by a Princor Registered Representative are offered through Princor. Princor and Principal Life are members of the Principal Financial Group, Des Moines, IA 50392.
Before investing in mutual funds, investors should carefully consider the investment objectives, risks, charges and expenses of the funds. This and other information is contained in the free prospectus, which can be obtained from your local representative, by visiting www.principal.com, or by contacting us at 1.800.547.7754. Please read the prospectus carefully before investing money.