The Frugal Fiduciary Small Business 401(k) Blog
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Index funds not only offer 401(k) participants superior returns to comparable actively-managed funds net of fees, they are a clear and simple way for 401(k) sponsors to meet their investment-related fiduciary responsibilities. Sponsors need only select three or more prudent investments that allow plan participants to sufficiently diversify their accounts. Index funds are indisputably “prudent” by meeting their investment objective for market-correlated returns at reasonable fees.