Measuring Alphas for Morningstar Retirement Manager
Our research shows that Morningstar Retirement Manager, a managed accounts service, added measurable value to retirement plans from 2013 to 2024, delivering positive annualized alpha across nearly 27,000 participants. The service outperformed during down markets and may offer more downside protection potential for older retirement savers, who can be more vulnerable to market volatility and have less time to recover from losses. These findings highlight how Morningstar Retirement Manager may help improve retirement outcomes by providing downside protection potential and tailored advice across different participant needs.
Key Findings
- Morningstar Retirement Manager has on average added positive alphas for all three recordkeepers examined from 2013 to 2024 with both the one-factor and nine-factor models.
- Morningstar Retirement Manager has on average performed better in down markets than in normal and up markets.
- Morningstar Retirement Manager has on average performed better for senior participants than young participants.
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Morningstar Retirement empowers investor success by providing research- and technology-driven products and services that help individuals reach their retirement goals. With advisory services provided by Morningstar Investment Management LLC, Morningstar Retirement supports and collaborates with workplace retirement plans and other industry players to differentiate their services, stay competitive, and reach new markets, all in service of building a better retirement system.
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Morningstar Retirement Manager is offered by Morningstar Investment Management LLC and is intended for citizens or legal residents of the United States or its territories. Investment advice generated by Morningstar Retirement Manager is based on information provided and limited to the investment options available in the defined contribution plan.
Measuring Alphas for Morningstar Retirement Manager
In no way should any performance shown be considered indicative or a guarantee of the actual or future performance of an actual defined contribution plan participant using Morningstar Retirement Manager or viewed as a recommendation for a plan sponsor or participant to offer or use Morningstar Retirement Manager, respectively. Actual results of an individual participant may differ substantially from the historical hypothetical performance shown and may include an individual participant incurring a loss. Past performance is no guarantee of future results. Investing involves numerous risks, and there is always the potential of losing money. You should consult with legal, tax, financial, or other advisors, prior to making any investment decisions.
Morningstar Investment Management does not guarantee that the results of their advice, recommendations, or the objectives of an investment option will be achieved. Morningstar Investment Management has a conflict of interest in analyzing Morningstar Retirement Manager’s value as its advisory fee is based on the amount of assets managed through Morningstar Retirement Manager.
IMPORTANT: The projections or other information generated by this analysis regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Results may vary with use and over time, reflecting any changed circumstances, assumptions or variables upon which the analysis is based. The analysis relates only to the strategies shown herein, other strategies not considered may have characteristics similar or superior to those being analyzed.
Projections involve known and unknown risks, uncertainties, and other factors which may cause actual results to differ materially and substantially from any future results or performance expressed or implied by the projection for any reason. Projections in no way represent a guarantee that a particular result with be produced or achieved. Projections are provided for illustrative purposes only and are not warranted to be correct, complete, or accurate. This analysis uses asset classes as a proxy for investments. The projections do not represent actual securities or client performance. Security implementation decisions may result in significantly different outcomes and have a significant effect on the performance of a portfolio of securities. These projections alone cannot determine which securities to buy or sell, or which investment strategy to invest in.
Hypothetical Performance
Hypothetical performance is investment performance not actually achieved by any portfolio of a financial professional. Hypothetical performance may include, but is not limited to, model, back-tested, targeted, or projected performance, and/or performance based on proxies for investments.
Hypothetical performance is theoretical, for illustrative purposes only, and is not reflective of an investor’s actual experience. Actual performance will vary.
Hypothetical performance does not reflect actual trading and may not reflect the impact that material economic and market factors have on the decision-making process for your account.