Participants who prefer to create their own portfolio can select from the core investment funds below. Participants can choose to invest in any combination of the investment funds offered. To help you create a diversified portfolio and determine the mix that's right for you, take the Risk Tolerance Quiz.
Participants may obtain fund daily unit values by accessing their account online or calling 212-306-7760.
The investment objective of the Stable Income Fund is to conserve principal and to provide a steady rate of return. The Fund invests in a combination of insurance company general account investment contracts, a "wrapped" portfolio of high quality bonds, and other fixed income investments as well as cash equivalents. A portfolio is "wrapped" when an insurance company or bank issues a form of investment contract [or wrapper agreement] providing a guarantee that member withdrawals from the portfolio will not be adjusted for changes in market conditions. A wrapper agreement provides price stability by helping to protect the Fund from severe changes in market value and, subject to certain conditions, provide repayment of principal and interest to Plan participants.
|Portfolio of synthetic GICs (Blackrock, PIMCo, NISA & JP Morgan)|
|Fiduciary Capital Management|
|Benchmark: Barclays 1-3 Year Treasury Bond Benchmark|
The weighted average maturity (duration) of the Stable Income Fund is expected to be between three and five years. The Fund is designed to gradually track the general level of intermediate term interest rates and preserve principal. Investments held in this portfolio will be limited to those issuers who meet stringent criteria with respect to diversification and credit quality. The level of risk and return is expected to be lower than that of the Plan's other actively managed investment fund options over long time periods. Investment return will be from interest income.
Contracts within the fund include general account investment contracts issued by AAA, AA or A rated insurance companies as well as actively managed fixed-income portfolios with an average quality of AA/Aa. Money invested in these fixed-income portfolios is carried at book value (principal and accumulated interest do not fluctuate). A certain percentage of the fund assets will mature and be reinvested every year.
The fund is valued daily with a fluctuating net asset value (NAV). The fund does not distribute income or capital gains. The investment income is reinvested within the fund daily. As a result, the NAV is expected to increase daily reflecting the net yield of the fund for that day.
The return for the Fund is communicated to participants quarterly on their statements as a fixed yield that remains unchanged for the entire quarter. The yield is reset on the first day of each subsequent quarter.
The Fund is designed to provide a stable return and preserve principal.
Please note, the Fund described in this Investment Profile is not FDIC insured; is not a deposit or obligation of, nor guaranteed by, any financial institution; and is not guaranteed by the New York City Deferred Compensation Plan ("Plan") or any federal, state or local government agency.
This fund may be a good choice for participants looking to reduce volatility and who are willing to trade off higher return potential for greater stability. Participants closer to retirement may wish to allocate a larger portion of their portfolio to the fund.
View the Stable Income Fund Profile (PDF)
Fund Manager Fact Sheet (PDF)
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The investment objective of the Bond Fund is to maximize total return over a full market cycle while actively managing risk. An allocation to this fund may be beneficial as a part of a balanced portfolio to hedge against the significantly higher risk of equities. The Fund employs multiple active management strategies, typically investing in a diversified portfolio including government, government agency, corporate [including high yield], mortgage and foreign securities [including emerging market bonds]; derivatives may be actively used for return enhancement as well as risk hedging. The return of the Fund will consist of interest income and market appreciation [or depreciation] - while typically seeking opportunity to provide capital gains there may be periods of time when the return on the Bond Fund is negative.
|Pacific Investment Management Company (PIMCO)|
|BlackRock, Inc (effective March 5, 2009)|
|Benchmark: Barclays US Aggregate|
Investors in the Bond Fund are subject to a number of different risks. By diversifying the assets between two managers, an attempt is made to reduce concentration risks while keeping fees low. The principal risks associated with the bond fund include:
Interest Rate Risk
Investors in the Fund may have the value of their investments affected by either an increase or decrease in overall interest rates. Interest rate risk is the risk that fixed income securities will decline in value because of an increase in the general level of interest rates; a fund with a longer average portfolio maturity [measured as effective duration, or the sensitivity to a 1 percentage point change in the level of interest rates.] will be more sensitive to changes in interest rates than a fund with a shorter average maturity. Over the past five years the effective duration of the Bond Fund, reflecting the broad fixed income markets has ranged between 4.0 and 5.7 years.
Sector and Issuer Risk/downloads/pdf/shared/internatsmall.pdf
Investors in the Fund will typically be diversified across quality, market sectors and bond issuers but managers may hold concentrated positions. While investing across the entire quality spectrum including below investment grade rated securities, the fund will maintain an average investment grade quality rating of A(S&P)/A2(Moody's) . By being invested in multiple sectors, investors are subject to credit risk, high yield risk, mortgage-related and other asset-backed risk, foreign (non-US) investment risk, emerging markets risk and currency risk. Credit risk and high yield risk relate to when the issuer of a fixed income security is unable or unwilling to meet its financial obligations. In the case where credit risk increases or where markets are under significant stress,, this may lead to liquidity risk, or the risk that individual securities in the portfolio may be difficult to sell at an appropriate price or time to achieve the desired level of exposure to a certain sector. The market values of mortgage-related and other asset-backed assets is heavily driven by movements in interest rates (interest rate risk) and the timing of cash flows (pre-payment risk). Foreign, emerging market and currency risks are all risks that originate from investing in non-U.S. securities that are dependent on economies and currencies with different characteristics than the United States. As with any security, an investment is also subject to the risk that the value may decline for a reason directly related to the issuer (management performance, reduced demand for issuer's goods, etc) or from risks that affect particular industries or securities markets generally.
Investors in the Fund should be aware that the investment managers that manage the Fund may utilize derivative instruments to help maximize total return and manage risk. However, utilizing derivative instruments may potentially introduce liquidity, mispricing, market, credit and management risks. There is also a risk with derivative instruments that the value of the instrument may not correlate perfectly with the underlying asset from which the value of the instrument was supposed to be derived.
The underlying portfolio managers attempt to make educated investments in those securities where their professional judgment leads them to believe the potential return justifies the risks they accept. As with all Funds, we strongly encourage participants to review the Bond Fund profile to better understand the risks involved.
The Bond Fund is expected to provide a greater return than the Stable Income Fund over a market cycle (5 plus years) with greater variability. Conversely, the Bond Fund is expected to provide lower returns than equity funds over a market cycle (5 plus years) with lower variability. The value of the fund will increase and decrease over time as the value of the fund's investments increase and decrease with the movement in market interest rates and the extra yield [spread] compensation for investing in non-treasury securities like corporates and mortgages. As a result, at any point in time, participant investments in the fund may be greater than or less than the amount they contributed to the fund. Participants should not view the Bond Fund as a risk-free investment.
View the Bond Fund Profile (PDF)
PIMCO - Individual Fund Manager Fact Sheet (PDF)
BlackRock - Individual Fund Manager Fact Sheet (PDF)
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The objective of the Equity Index Fund is to replicate the return of the Standard & Poor's 500 Index.* This fund is intended to provide participants with exposure to the broad large-cap domestic equity market by replicating the market index consisting of the common stock of large domestic companies. Investment returns are expected to primarily result from capital appreciation rather than through current income from dividends.
BNY Mellon Asset Management S&P 500 Index Fund, a separately managed account, attempts to provide investment results that parallel the performance of the unmanaged Standard & Poor's 500 Composite Stock Price Index.* Given this objective, the fund is expected to provide investors with long-term growth of capital and income as well as a reasonable level of current income.
The fund is designed for investors who want a low-cost method of consistently paralleling the return of the S&P 500 Index. The fund provides its investors with broad diversification and significantly less specific risk than a more concentrated portfolio.
*"Standard & Poor's 500," "S&P 500," "Standard & Poor's," "S&P," and "500" are trademarks of the McGraw-Hill Companies, Inc.
Since this fund is invested in equities, there can be substantial fluctuations in the share value of the fund.
Historically, this fund has provided a substantial rate of return in excess of inflation, and is expected to do so in the future.
Participants in their 20's or 30's may want to consider investing a substantial portion of their portfolio in this fund; participants in their 40's may want to invest a more modest portion; and participants in their 50's or 60's may want to dedicate a small portion of their portfolio to the Equity Index Fund.
View the Equity Index Fund Profile (PDF)
BNY Mellon Asset Mgmt. S&P 500 Index Fund - Individual Fund Manager Fact Sheet (PDF)
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The objective of the Socially Responsible Fund is long-term total return. The fund intends to meet this objective primarily by investing in the stocks of companies in the MSCI World Index*, a free float-adjusted market capitalization index that is designed to measure equity market performance in the global developed markets. Investment returns are expected to result primarily from capital appreciation rather than through current income from dividends.
Effective January 1, 2007, the Socially Responsible Fund is managed by Aberdeen Asset Management. The fund is being managed as a separate account, which ensures continued low fees.
The fund follows an active investment strategy, investing in a subset of the firm's global equity buy list that has been further subjected to the firm's socially responsible investing criteria. The fund will aim to be fully invested in stocks at all times.
The fund seeks to invest in companies that have both fundamental strength and acceptable social behavior. For companies to pass the first hurdle, regional analysts identify stocks with quality management and superior earnings potential, based on the firm's SRI team which bases its analysis on criteria covering three broad areas of social, ethical and environmental policies and practices. Specifically, the fund seeks companies displaying community involvement, good corporate citizenship, a commitment to the environment, support for human rights, a commitment to equal opportunity employment and ethical behavior. The fund excludes companies that derive a significant portion of their revenue from alcohol sales or production, gambling, military contracts, nuclear energy, pornography, tobacco or weapons. Companies are also excluded if they have a pattern of non-compliance with environmental codes, conduct business in countries with human rights abuses without good cause or have a history of engaging in compulsory or child labor. The portfolio is expected to have broad regional, country, and industry exposure.
As with any stock fund, there can be substantial fluctuations in the fund's daily unit price over the short term.
Over the long term, the fund is expected to generate capital appreciation resulting in a rate of return significantly in excess of inflation.
This Fund is suitable for participants who want to add a global equity fund with a socially and environmentally screening component. In particular, investors seeking long-term growth of capital should consider investing in this fund. The Fund is not included in any of the Pre-Arranged Portfolios so those interested in investing in this option must make a direct allocation. The Fund may not be appropriate for investors with a short time horizon and those unwilling or unable to accept moderate to significant fluctuations in price.
*Morgan Stanley Capital International, MSCI, ACWI, EAFE and all other service marks referred to in this document are the exclusive property of MSCI or its affiliates. All MSCI indices are the exclusive property of MSCI.
View the Socially Responsible Fund Profile (PDF)
Aberdeen Asset Management - Individual Fund Manager Fact Sheet (PDF)
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The Mid-Cap Equity Fund's objective is to provide long-term growth of capital by investing primarily in the stocks of medium-sized, U.S. companies. Investment returns are expected to result from capital appreciation, rather than from current income through dividends.
Equity funds are often described by the size of the companies in which the funds invest. "Cap" is an abbreviation for a company's "market capitalization" or size. Mid-cap funds invest in the stock of medium-sized companies, with market capitalizations generally between $500 million and $15 billion.
The Mid-Cap Equity Fund option is made up of the investment funds shown in the table below:
|Wellington Management Company, LLP||Growth|
|State Street Global Advisors|
The Mid-Cap Equity Fund is a blended fund, which gives participants exposure to the broad mid-cap market. The fund is comprised of a growth manager, and a value manager, resulting in a mid-cap equity fund that is style neutral. With blended funds, participants will be protected from adverse effects of style risk when one investment management style is out of favor. The separate account structure of the fund means lower fees, so more of the fund's earnings are credited to participants' accounts.
Since this option is invested in the stock market, there could be substantial fluctuations in the share value of the fund over short-term periods.
Over longer time periods, mid-cap equity funds have provided substantial returns above inflation. Specifically, the Mid-Cap Equity Fund is expected to outperform the Plan's large cap equity funds (i.e., the Equity Index Fund and Socially Responsible Fund) with higher volatility. In addition, the Mid-Cap Equity Fund provides a source of diversification relative to other equity fund investments.
This fund is suitable for participants who favor an active management strategy and who are willing to take on more risk than is typically found in the Equity Index Fund. This is best suited for aggressive investors, particularly those who are at least ten years away from retirement.
View the Mid-Cap Equity Fund Profile (PDF)
Earnest Partners - Individual Fund Manager Fact Sheet (PDF)
Wellington Management Company, LLP - Individual Fund Manager Fact Sheet (PDF)
State Street Global Advisors - Individual Fund Manager Fact Sheet (PDF)
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The International Equity Fund's objective is to provide long-term growth of capital through exposure to the broad international stock market. The fund is designed to invest substantially all of its assets outside the U.S. and to diversify broadly among developed, newly-industrialized, and emerging countries throughout the world. It offers exposure to the potential risks and rewards of foreign markets, including foreign currency fluctuations.
Restructuring the International Equity Fund...now includes Small Cap Markets
(as of October 1, 2012)
ACWI (All Counrty World Index)
The International Equity Fund option is made up of the investment funds shown in the following table:
|Mondrian Investment Partners, Ltd.||Value|
|Copper Rock (effective October 2012)||Small Cap|
|State Street Global Advisors||Index|
The blend of these managers results in an international equity fund that is "investment-style neutral" (i.e., neither growth, nor value), but still retains its exposure to the broad international market. Its benchmark is the MSCI EAFE Index. With blended funds, participants will be protected from adverse effects of style risk when an investment management style is out of favor, as well as benefit from the outperformance of an individual manager. The separate account structure of the fund means lower fees, so more of the fund's earnings are credited to participants' accounts.
Since many non-U.S. economies are not as well established as that of the United States, there may be a higher risk with this fund than with a U.S.-based equity fund. Over the short run, major fluctuations in price per share of non-U.S. stocks are not uncommon and should be expected. In addition to price fluctuations because of stock market movements, changes in the value of foreign currencies in relation to the dollar may also impact fund performance. Nevertheless, because U.S. and foreign markets often do not mirror each other, it is likely that in any one-year period the investment performance in one or more foreign markets will not be the same as in the U.S. stock market. Therefore, non-U.S. equities may provide an opportunity for diversification.
Historically, international equity investments have provided a source of diversification relative to the U.S. stock market. As a result, it is expected that international stocks will provide incremental returns above the returns available from the U.S. stock market. There will also be periods where international stocks will underperform the U.S. stock market.
The International Equity Fund provides an opportunity for diversification within a participant's portfolio. While international investments can be more volatile over shorter time periods, younger participants having a longer-term perspective may be comfortable allocating a more substantial portion of their portfolio to the International Equity Fund. Plan participants who are older or who have a relatively short-term investment time horizon may be comfortable allocating a smaller portion of their portfolio to the International Equity Fund.
Lump-sum withdrawals and periodic distributions will not incur the redemption fee, and payroll contributions made to the International Equity fund held less than the 32 days will not be included in the calculation of the redemption fee if they are transferred out of the fund.
View the International Equity Fund Profile (PDF)
Baillie Gifford - Individual Fund Manager Fact Sheet (PDF)
Mondrian - Individual Fund Manager Fact Sheet (PDF)
Copper Rock - Individual Fund Manager Fact Sheet (PDF)
State Street- Individual Fund Manager Fact Sheet (PDF)
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The Small-Cap Equity Fund seeks long-term growth of capital by investing primarily in the common stocks of small and medium-sized companies which are believed to have good prospects for capital appreciation. Consistent with the objective for this fund, returns to small company stock portfolios tend to be higher but more volatile than those to portfolios of larger company stocks. Moreover, returns in small company stock portfolios tend to exhibit less than 100% correlation with returns to large company stock portfolios. Therefore, the Plan expects this fund to provide possible diversification opportunities to participants relative to investment in either or both of the Equity Index and International Equity Funds. Investment return is expected to result primarily from capital appreciation.
Generally, the companies in the Small-Cap Equity Fund have a market capitalization between $100 million and $5 billion. This option invests in companies of this size because they have a greater potential for appreciation than large companies. These companies are expected to have rapid growth in sales and earnings.
The Small Cap Equity Fund is a blended fund, which gives participant's exposure to a number of managers and a variety of styles within a single investment option.
|State Street Global Advisors||Index|
Dimensional Fund Advisors
|T. Rowe Price||Growth|
|Wellington Management Company, LLP||Core|
The Small-Cap Equity Fund invests primarily in the common stocks of small and mid-sized companies, which are perceived to be either quality companies which are undervalued or companies which are believed to have good prospects for growth. Most of the assets will be invested in U.S. common stocks. However, the fund may also purchase other types of securities such as foreign securities, convertible securities, and warrants, when considered consistent with the fund's investment objective and program.
Over the short run, there may be substantial fluctuation in the fund.
By offering greater opportunities for capital appreciation than funds invested in larger, more established companies, the fund expects to provide a substantial return in excess of inflation.
Because of the price volatility of the securities purchased by this fund, and the greater risk of loss involved when investing in small companies, it is best suited for an individual who is an aggressive investor seeking long-term growth who has a longer term investment time horizon. It is not recommended for Participant's in their 50's or 60's who are likely to have a shorter investment time horizon.
View the Small Cap Fund Profile (PDF)
T. Rowe Price - Individual Fund Manager Fact Sheet (PDF)
Dimensional Fund Advisors, Inc. - Individual Fund Manager Fact Sheet (PDF)
Wellington Management Company, LLP. - Individual Fund Manager Fact Sheet (PDF)
State Street - Individual Fund Manager Fact Sheet (PDF)
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