Defined contribution – Simplify with worldwide

Home bias (a significant over-investment in one's home country) has been a long-entrenched pattern in self-directed defined contribution (DC) plans; the result is that participants are missing out on potentially attractive investment opportunities abroad. At the same time, plan sponsors are grappling with the phenomenon of choice overload, as research has shown that the expansion of menu options has proved overwhelming for participants.

In our recent DC Insights article, "Simplify with worldwide", we explain why we believe that reducing the number of menu options and replacing some with worldwide strategies — encompassing the U.S., foreign developed markets and emerging markets – should help address choice overload and encourage more participants to allocate to non-U.S. markets.

Many participants have long been wary of non-U.S. investments, viewing them as overly risky. We believe those participants may feel more comfortable gaining exposure to foreign markets if they know that their non-U.S. investments will be combined with a U.S. allocation in a worldwide strategy.

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Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

Investing outside the United States involves risks such as currency fluctuations, periods of illiquidity and price volatility, as more fully described in the prospectus. These risks may be heightened in connection with investments in developing countries. Small-company stocks entail additional risks, and they can fluctuate in price more than larger company stocks.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectus, summary prospectus or the funds' Characteristics statement, which can be obtained from a financial professional, or your relationship manager, and should be read carefully before investing. Additional composite information is available for your reference.