In investing, as in life, it is possible to have too much of a good thing. If you chose to invest your UC 403(b), 457(b), or DC Plan account in just one fund (other than a UC Pathway Fund), or if one of your funds has had a great run, you may be overly concentrated in one area of the market.
Why could devoting too much of your account to a single investment be a risk?
A key strategy for managing your risk: Have a well-diversified portfolio. Fortunately, UC Pathway Funds make it easy to do just that.
Each professionally managed low-fee UC Pathway Fund gives you a diversified, all-in-one investment mix created from funds within the UC Retirement Savings Plans Fund Menu.
Of course, always consider your personal risk tolerance and financial situation before you invest in any fund, including a UC Pathway Fund.
The UC Pathway Funds are subject to the same kinds of risks you’d face if you chose a diversified portfolio on your own. For example, the money held in a UC Pathway Fund is subject to the volatility of the financial markets, including equity and fixed income investments in the U.S. and abroad. And your fund may be subject to risks associated with investing in high yield, small cap, and foreign securities. Naturally, principal invested is not guaranteed at any time, including at or after the fund’s target date.
The difference is that the investment risks of each Pathway Fund will change over time as the fund’s asset allocation changes. That’s because UC Pathway Funds allocate risk based on time horizon, taking more risk at the beginning and gradually reducing risk closer to their target dates.
The UC Pathway Funds help simplify your investment decision by providing.
*Annual returns shown are from January 1 to December 31, 2008.
UC Global Equity Fund, UC Pathway Fund 2050, UC Pathway Income Fund, UC Savings Fund are not mutual funds.
The expense ratio for a mutual fund is the total annual fund or class operating expenses (before waivers or reimbursements) paid by the fund and stated as a percent of the fund’s total net assets. Where the investment option is not a mutual fund—as is the case with the UC funds shown above—the figure displayed in the expense ratio field is intended to reflect similar information. However, it may have been calculated using methodologies that differ from those used for mutual funds. Mutual fund data comes from the fund's prospectus; non–mutual fund data has been provided by the plan sponsor or the trustee. Fees and expenses may be associated with any investment option. Expense information changes periodically. Please consult NetBenefits for updates.
Diversification and asset allocation do not ensure a profit or guarantee against loss.
Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market or economic developments.
In general the bond market is volatile and bonds entail interest rate risk (as interest rates rise bond prices usually fall and vice versa). This effect is usually pronounced for longer-term securities. Bonds also entail the risk of issuer default, issuer credit risk and inflation risk.
Target date investments are generally designed for investors expecting to retire around the year indicated in each investment's name. The investments are managed to gradually become more conservative over time. The investment risks of each target date investment change over time as its asset allocation changes. They are subject to the volatility of the financial markets, including equity and fixed income investments in the U.S. and abroad and may be subject to risk associated with investing in high yield, small cap and foreign securities. Principal invested is not guaranteed at any time, including at or after their target dates.
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