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 (
) 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
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
,' offer 401(k) investors more investment choices, lower fees, and
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
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
(NYSEArca: SOCL) was introduced and the fund attempts to invest in
global publicly traded companies in the electronic social
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 Netease.com Inc. The three largest
countries represented are China (36.28%), US (26.22%), and Japan
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% .