• How a multi-manager investment approach to defined-contribution plans can help support good decisions – and potentially great investment outcomes – amid difficult times.
• In markets like these, the value of a smooth ride of investment returns is easy to understand.
• The greatest responsibility of plan sponsors is to support the achievement of great investment outcomes.

For the first time in years, the cycle of investor sentiment has turned decisively toward fear. The halting of economic activity precipitated by the COVID-19 global pandemic is the perfect storm for fear. It threatens both accumulated retirement savings and human capital at once and comes with so much uncertainty around the severity and duration of impact, that fear is a perfectly reasonable response. Consider this: The historic standard range for the CBOE Volatility Index (the VIX) is between 12.23 and 27.31. The VIX recently spiked to over 80 in March – just one of many manifestations of this fear. As I write this on June 30, it has settled down to just over 30, but that’s still outside of the top end of its standard range.

In the face of this fear, how can investment options in defined contribution plans support good decisions and great investment outcomes? After all, plans need to find the right balance of several goals which are not always well aligned:

• Give participants a smooth ride while achieving investment outcomes Deliver great returns through superior investment management Avoid choice overload for plan participants

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