Effective March 13, 2013, two new fund options will be available to participants of the Amherst College Defined Contribution Retirement Plan (the Plan).
The TIAA-CREF Inflation-Linked Bond Fund is added to the existing fixed-income/bond options, and seeks a long-term rate of return that outpaces inflation, primarily through investment in inflation-indexed bond and fixed-income securities whose returns are designed to track a specified inflation index over the life of the bond. Under normal circumstances, the account invests at least 80% of its assets in U.S. Treasury Inflation-Indexed Securities. This fund is the mutual fund equivalent of the previously available CREF Inflation-linked Bond Fund, which is an annuity fund. The mutual fund option has similar underlying investments, but has lower management fees and expenses which, all other things being equal, would result in higher net returns to investors.
The Neuberger Real Estate Fund seeks total return through investment in real estate securities, emphasizing both capital appreciation and current income. The fund normally invests at least 80% of net assets in equity securities issued by real estate investment trusts ("REITs") and common stocks and other securities issued by other real estate companies. It defines a real estate company as one that derives at least 50% of revenue from, or has at least 50% of assets in, real estate. The addition of this option allows participants to concentrate on the U.S. real estate market, compared to the existing E.I.I International Property, which invests primarily in international property companies whose business is to own, operate, develop and manage international real estate. It invests at least 80% of net assets in the equity securities of non-U.S. companies with a primary emphasis on REITs that are “principally engaged” in the ownership, construction, management, financing, or sale of residential, commercial, or industrial real estate. Or, participants can invest in both funds to take advantage of the global real estate market.
Participants will also soon be receiving an announcement from TIAA-CREF regarding these changes.