Invest n Retire Gets Patent on 401(k) Platform


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Exchange-traded funds (ETFs) inside 401(k) plans is a new trend that could upend the 401(k) market.  

The U.S. Patent Office just granted Invest n Retire ( INR ) a patent on its 'System and Method for Managing Tax-Deferred Retirement Accounts.' The 401(k) provider is one of just a handful that now uses ETFs inside 401(k) plans.

Over the past three decades, mutual funds have dominated the $3 trillion 401(k) market, but the tide is changing.

'Up until now, everyone essentially only offered mutual funds which operate on antique systems developed back in the '70s,' said Darwin Abrahamson, founder and CEO of Invest n Retire.

401(k) plans that use ETFs, sometimes referred to as 'ETF(k) plans ,' offer 401(k) investors more investment choices, lower fees, and greater transparency.

As a significant number of investors continue to leave mutual funds in favor of ETFs, the only obstacle blocking the way for employees in retirement plans was technological limitations which INR has overcome.

'With our patented technology the industry no longer has to be constrained, moving forward with modern technology and better investment choices - ETFs. Our approach to solving the countless problems facing the retirement industry is unprecedented,' added Abrahamson.

INR's patent number is 8060428 and Portland, OR-based company was founded in 2000 and caters to 401(k) plans with $5 million or more in assets.

New ETF Offerings
This week the Global X Social Media Index ETF (NYSEArca: SOCL) was introduced and the fund attempts to invest in global publicly traded companies in the electronic social networking arena.

SOCL is linked to the the Solactive Social Media Index, which has exposure to 26 stocks involved in the social media industry. As of November 11, 2011, the underlying Index's three largest stocks were DeNA Co., Sina Corp. and Inc. The three largest countries represented are China (36.28%), US (26.22%), and Japan (19.95%).

The annual expense ratio for SOCL is 0.65%.

In related news, United States Commodity Funds launched the United States Copper Index Fund (NYSEArca: CPER) which tracks the SummerHaven Copper Index.

CPER holds a portfolio of copper futures contracts and the contracts are fully collateralized with 3-month U.S. Treasury Bills. The Copper Index attempts to maximize backwardation and minimize contango while using contracts in the liquid portions of the futures curve.

CPER's annual expense ratio is 0.95% .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , ETFs

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