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As a participant in the State of Connecticut's Deferred Compensation Plan, you may want to track how your investments are performing. One of the easiest ways to gauge the performance of your investments is to compare them to appropriate benchmarks. To help you do this, we are introducing benchmarks in the Investment Fund Performance charts. Following is an overview of what benchmarks are, and how they are used. In addition, there is also a short article about fund changes by ING Financial Advisers, LLC and Phoenix Investment Partners, as well as a chart listing the new benefit limits for 2003. |  |
| State Comptroller Nancy Wyman |
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Benchmarks: A Tool to Help You Evaluate Fund Performance
When investing for retirement, you want to have all the facts needed to make the best choices for you and your family. While there are many factors that need to be considered when assessing if an investment fits your portfolio needs - for example, are your investments diversified, and are you comfortable with the level of risk your investments carry - you also need to determine if individual investments are performing adequately. Comparing investment performance with an appropriate benchmark is one way for you to determine how your investments are performing. That's why we are now including benchmarks in the newsletter's Investment Fund Performance charts.
What Is a Benchmark?
Simply put, a benchmark is a standard that is used for comparison. Investment benchmarks are commonly used by both individual investors and professional portfolio managers to measure a fund's performance against indices that have similar investment objectives or share similar market characteristics. By comparing a fund's performance to that of its benchmark, you can determine whether or not the fund is performing at a level comparable to that of the indices.
A market index measures the price changes of an overall market, such as the stock market or the bond market. Some market indices may focus on funds with similar investment objectives.
One of the most frequently used market indices is the S&P 500, which is Standard & Poor's index of 500 widely held companies in the U.S. stock market. The performance of the S&P 500 is thought to be representative of the stock market as a whole, and as such it is commonly used as a benchmark for funds that are invested in stocks of larger, developed companies. The Frank Russell Company produces a series of U.S. equity indices. All Russell indices are subsets of the Russell 3000 Index, which features the 3,000 largest publicly-traded U.S. companies based on total market capitalization. Morgan Stanley Capital International (MSCI) publishes a family of international equity indices. Its indices, the most widely used benchmarks by global portfolio managers, are used as benchmarks for the international funds offered in the plan.
One Size Does Not Fit All
When comparing funds, it's important to use an appropriate benchmark. For example, while most people are familiar with the Dow Jones Industrial Average (DJIA), it is not a suitable benchmark for many funds, since it tracks the stock of only 30 blue chip American companies.
But how do you choose an appropriate benchmark for your particular investments? We've made it easy - benchmarks now are listed with each investment vehicle in the Investment Fund Performance charts. Each benchmark has been carefully chosen to closely match the corresponding investment offered by the plan. The fund offered by the plan will be followed by the appropriate benchmark. If funds in the same risk category share the same benchmark, the funds will be grouped together and the benchmark will appear below the funds. Benchmark funds will appear in shaded bars. By comparing your investment fund with an appropriate benchmark, you have a quick way to gauge your investment vehicle's performance against similar types of investments.
Remember, a benchmark is just one resource you can use when evaluating your investments. Diversifying your portfolio is also an extremely important part of creating an investment strategy, as well as taking into account your individual financial needs and circumstances.
2003 Benefit Limits
For 2003, the maximum amount you can defer to the Deferred Compensation Plan is $12,000 (up from $11,000 in 2002). If you will be age 50 or older by December 31, 2003, you can contribute up to an additional $2,000 for 2003, for a total contribution of $14,000 to the plan.
If you are eligible to participate in the State's 403(b) Program, these limits are in addition to any amount you contribute to the 403(b) Program.
Changes in Fund Offerings
In order to offer investment options that meet the standards of the State's investment policy statement, the investment options are annually reviewed. The review for 2002 is complete and while the investment opportunities offered by The Hartford remain the same, both ING Financial Advisers, LLC and Phoenix Investment Partners have made changes to their fund offerings.
ING Financial Advisers, LLC - new funds recently added:
In addition, the names of two funds have been changed to reflect the fact that ING has replaced the portfolios' investment sub-advisors:
Phoenix Investment Partners - new fund recently added:
If you have any questions, or would like more information about the investment opportunities or the changes to the funds, please contact your financial services organization.
Investment Fund Performance & Operating Fees
For the Period Ending
December 31, 2002
You may invest your contributions with any one of the plan's three financial services organizations: The Hartford, ING Financial Advisers, LLC (member SIPC), and Phoenix Investment Partners.
The following charts will help you evaluate your investment choices -both mutual funds and annuity options. They show the historical rates of return for each financial services organization's available investment options and the various operating fees that may be assessed against these options for the period ending December 31, 2002.
The rates of return columns are "net of expenses" and reflect the actual returns that would be applied to your account. This means that they already exclude the operating fees a financial services organization may charge you for managing, investing or marketing a particular investment option. Operating expenses appear in separate columns.
Results are historical and not intended to portray future performance. Current performance may be less than figures shown.
Please note that investment benchmarks may differ from the benchmarks provided in the funds' prospectuses.
About Your Fund Choices
To help you identify between these two types of options, variable annuities appear in italic print. When comparing two similarly styled mutual funds or annuity options, be sure to:
Recognize that while a fund's past performance may help you understand how well or poorly it has performed over a period of time, it's no guarantee of future results.
Consider the total expenses each fund charges as well as the kinds of services or benefits it provides. Keep in mind that you can reduce your overall investing costs by monitoring these expenses and taking them into account in your investment selection process.
| THE HARTFORD | |||||||
|---|---|---|---|---|---|---|---|
| Return on Investments (net of expenses) | Operating Expenses | ||||||
| Last Quarter | Rates of Return | ||||||
| Level of Risk |
Investment Options | 10/1/02-12/31/02 | 1 Year | Annualized 5 Years |
Management Fees |
Other Expenses |
Total Expenses |
| High | American Century Ultra | 3.29% | -23.68% | -0.69% | 0.98% | 0.70% | 1.68% |
| Russell 1000 Growth Index | 7.15 | -27.88 | -3.84 | ||||
| The Hartford International Opportunities Y | 7.28 | -20.48 | -3.29 | 0.85 | 0.91 | 1.76 | |
| MS EAFE Index | 6.48 | -15.66 | -2.61 | ||||
| The Hartford Small Company Y | 0.33 | -30.76 | -1.66 | 0.85 | 0.81 | 1.66 | |
| Russell 2000 Growth Index | 7.51 | -30.26 | -6.59 | ||||
| Janus Worldwide | 3.38 | -26.53 | -1.07 | 0.65 | 0.92 | 1.57 | |
| MS World Index | 7.75 | -19.54 | -1.76 | ||||
| American Century Income & Growth | 8.15 | -19.94 | -0.79 | 0.68 | 0.70 | 1.38 | |
| Hartford Capital Appreciation HLS | 8.41 | -20.30 | 5.28 | 0.63 | 0.80 | 1.43 | |
| Hartford Index HLS | 8.12 | -23.03 | -1.77 | 0.40 | 0.78 | 1.18 | |
| Hartford Stock HLS | 9.57 | -24.81 | -0.98 | 0.46 | 0.78 | 1.24 | |
| S&P 500 Index | 8.43 | -22.09 | -0.58 | ||||
| American Century Value | 8.18 | -13.30 | 3.23 | 1.00 | 0.70 | 1.70 | |
| Russell Mid Cap Value Index | 7.07 | -9.64 | 2.95 | ||||
| Fidelity Advisor Growth Opportunities | 7.56 | -23.01 | -7.76 | 0.35 | 1.45 | 1.80 | |
| Russell 1000 Index | 8.16 | -21.65 | -0.58 | ||||
| The Hartford MidCap Y | 7.42 | -15.15 | 13.09 | 0.83 | 0.83 | 1.66 | |
| Russell MidCap Growth Index | 9.16 | -27.41 | -1.82 | ||||
| Janus Twenty | 3.00 | -24.55 | 0.07 | 0.65 | 0.89 | 1.54 | |
| Russell 1000 Growth Index | 7.15 | -27.88 | -3.84 | ||||
| Medium | The Hartford Dividend and Growth Y | 9.64 | -14.30 | 1.34 | 0.75 | 0.80 | 1.55 |
| Russell 1000 Value Index | 9.22 | -15.52 | 1.16 | ||||
| Hartford Advisers HLS | 5.77 | -14.44 | 1.61 | 0.63 | 0.78 | 1.41 | |
| 50% S&P 500 + 50% LBAGG Index | 5.18 | -6.60 | 3.94 | ||||
| Low | Hartford Total Return Bond Y | 3.96 | 9.15 | 6.26 | 0.65 | 0.82 | 1.47 |
| LB Aggregate Bond Index | 1.57 | 10.25 | 7.55 | ||||
| General Account 1 | 4.30 | N/A | N/A | 0.00 | 0.00 | 0.00 | |
| ING FINANCIAL ADVISERS, LLC | |||||||
|---|---|---|---|---|---|---|---|
| Return on Investments (net of expenses) | Operating Expenses | ||||||
| Last Quarter | Rates of Return | ||||||
|
Level of Risk |
Investment Options | 10/1/02-12/31/02 |
Annualized 1 Year |
5 Years |
Management Fees |
Other Expenses |
Total Expenses |
| High | Janus Aspen Series Aggressive Growth Portfolio | 2.19% | -28.51% | -2.86% | 0.65% | 0.82% | 1.47% |
| Russell Mid Cap Growth Index | 9.16 | -27.41 | -1.82 | ||||
| Janus Aspen Series Worldwide Growth Portfolio | 3.44 | -26.10 | -0.15 | 0.65 | 0.84 | 1.49 | |
| MSCI World Index | 7.75 | -19.54 | -1.76 | ||||
| ING Salomon Brothers Aggressive Growth Portfolio/Alger American Small Cap 2 | 2.36 | -35.82 | -8.32 | 0.68 | 0.93 | 1.61 | |
| Russell 3000 Growth Index | 7.17 | -28.03 | -4.11 | ||||
| ING JPMorgan Fleming International Portfolio/Scudder VLIF International 2 | 3.73 | -18.73 | -2.69 | 0.80 | 1.00 | 1.80 | |
| MS EAFE Index | 6.48 | -15.66 | -2.61 | ||||
| Pioneer Mid Cap Value VCT Portfolio | 7.81 | -11.92 | 3.08 | 0.65 | 0.94 | 1.59 | |
| Russell Mid Cap Value Index | 7.07 | -9.64 | 2.95 | ||||
| ING VP Index Plus LargeCap Portfolio | 8.07 | -22.15 | -0.71 | 0.35 | 0.90 | 1.25 | |
| ING VP Growth and Income Portfolio | 1.86 | -25.59 | -6.78 | 0.50 | 0.89 | 1.39 | |
| ING VP Value Opportunity Portfolio | 2.96 | -26.55 | 0.73 | 0.60 | 0.91 | 1.51 | |
| Fidelity® VIP Contrafund® Portfolio | 1.14 | -10.07 | 2.88 | 0.58 | 0.90 | 1.48 | |
| S&P 500 Index | 8.43 | -22.09 | -0.58 | ||||
| ING VP Small Company Portfolio | 2.04 | -23.84 | 1.61 | 0.75 | 0.91 | 1.66 | |
| Russell 2000 Index | 6.16 | -20.48 | -1.36 | ||||
| AIM V.I. Growth Fund | 6.79 | -31.52 | -8.76 | 0.62 | 1.06 | 1.68 | |
| Janus Aspen Series Growth Portfolio | 1.82 | -27.10 | -2.37 | 0.65 | 0.81 | 1.46 | |
| Russell 1000 Growth Index | 7.15 | -27.88 | -3.84 | ||||
| Medium | Fidelity® VIP Equity-Income Portfolio | 9.18 | -17.61 | -0.49 | 0.48 | 0.90 | 1.38 |
| Russell 3000 Value Index | 8.91 | -15.18 | 1.19 | ||||
| ING VP Balanced Portfolio, Inc. | 4.78 | -11.02 | 1.75 | 0.50 | 0.89 | 1.39 | |
| Calvert Social Balanced Portfolio | 4.63 | -12.85 | -0.14 | 0.70 | 0.98 | 1.68 | |
| 60% S&P 500 + 40% LBAGG Index | 5.86 | -9.82 | 3.10 | ||||
| Janus Aspen Series Balanced Portfolio | 1.96 | -7.19 | 7.35 | 0.65 | 0.81 | 1.46 | |
| 50% S&P 500 + 50% LBAGG Index | 5.18 | -6.60 | 3.94 | ||||
| Low | ING VP Bond Portfolio | 1.69 | 7.47 | 5.90 | 0.40 | 0.90 | 1.30 |
| LB Aggregate Bond Index | 1.57 | 10.25 | 7.55 | ||||
| ING VP Money Market Portfolio 3 | 0.16 | 0.81 | 3.65 | 0.25 | 0.89 | 1.14 | |
| 91 Day Treasury Bills | 0.33 | 1.60 | 4.04 | ||||
| ING Fixed Account-457/401 | 4.80 | N/A | N/A | 0.00 | 0.00 | 0.00 | |
| PHOENIX INVESTMENT PARTNERS | |||||||
|---|---|---|---|---|---|---|---|
| Return on Investments (net of expenses) | Operating Expenses | ||||||
| Last Quarter | Rates of Return | ||||||
|
Level of Risk |
Investment Options | 10/1/02-12/31/02 | 1 Year |
Annualized 5 Years |
Management Fees |
Other Expenses |
Total Expenses |
| High | Phoenix-Aberdeen Worldwide Opportunities A | 7.01% | -17.59% | -0.20% | 0.75% | 0.81% | 1.56% |
| MS World Index | 7.75 | -19.54 | -1.76 | ||||
| Phoenix-Seneca Mid-Cap Edge A | 0.16 | -32.10 | 1.77 | 0.80 | 0.60 | 1.40 | |
| Russell Mid Cap Growth Index | 9.16 | -27.41 | -1.82 | ||||
| Phoenix-Engemann Small-Mid Cap Growth A | 18.55 | -30.51 | -2.60 | 0.91 | 0.76 | 1.67 | |
| Russell 2000 Growth Index | 7.51 | -30.26 | -6.59 | ||||
| Phoenix-Hollister Small Cap Value A | -1.16 | -21.13 | 4.95 | 0.90 | 0.74 | 1.64 | |
| Russell 2000 Value Index | 4.92 | -11.43 | 2.71 | ||||
| Phoenix-Aberdeen International A | 8.07 | -14.84 | -3.45 | 0.75 | 1.06 | 1.81 | |
| MS EAFE Index | 6.48 | -15.66 | -2.61 | ||||
| Phoenix Duff & Phelps Core Equity A 4 | 0.15 | -18.89 | -6.06 | 0.75 | 1.60 | 2.30 | |
| Phoenix-Oakhurst Growth & Income A | 7.88 | -22.95 | 0.43 | 0.75 | 0.60 | 1.35 | |
| Phoenix-Kayne Large Cap A | 8.14 | N/A | N/A | 0.75 | 0.45 | 1.20 | |
| S&P 500 Index | 8.43 | -22.09 | -0.58 | ||||
| Phoenix-Engemann Capital Growth | 5.82 | -25.41 | -7.92 | 0.67 | 0.50 | 1.17 | |
| Phoenix-Engemann Nifty Fifty A 4 | 4.66 | -26.75 | -7.46 | 0.82 | 0.65 | 1.47 | |
| Phoenix-Seneca Growth A | 3.30 | -29.34 | -1.27 | 0.70 | 0.59 | 1.29 | |
| Russell 1000 Growth Index | 7.15 | -27.88 | -3.84 | ||||
| Phoenix-Hollister Value Equity A | 4.17 | -18.60 | 1.95 | 0.75 | 0.74 | 1.49 | |
| Russell 1000 Value Index | 9.22 | -15.52 | 1.16 | ||||
| Medium | Phoenix-Oakhurst Managed Assets A | 5.25 | -6.53 | 1.05 | 1.00 | 0.60 | 1.60 |
| Phoenix-Engemann Balanced Return A | 3.53 | -15.78 | 0.95 | 0.73 | 0.57 | 1.30 | |
| 60% S&P Index + 40% LBAGG Index | 5.86 | -9.82 | 3.10 | ||||
| Low | Phoenix-Goodwin Multi-Sector Short Term Bond A | 2.73 | 7.40 | 5.62 | 0.55 | 0.95 | 1.50 |
| LB Intermediate Aggregate Index | 1.53 | 9.49 | 7.47 | ||||
| Phoenix-Duff & Phelps Core Bond A | 1.09 | 5.22 | 5.07 | 0.45 | 0.70 | 1.15 | |
| LB Aggregate Bond Index | 1.57 | 10.25 | 7.55 | ||||
| Phoenix-Goodwin Money Market A | 0.31 | 1.27 | 3.99 | 0.40 | 0.46 | 0.86 | |
| 91-Day Treasury Bills | 0.33 | 1.60 | 4.04 | ||||
1 The Declared Rate is credited through the close of the calendar year on contributions received during the designated calendar quarter. The rate for the first quarter 2003 is 4.15%. For contributions received prior to January 1, 2003, the Declared Rate is 4.15%. Rates quoted are effective annual yields.
2 ING MFS Emerging Equities Portfolio-Initial Class was renamed ING Salomon Brothers Aggressive Growth Portfolio, as of 12/16/2002. ING Scudder International Growth Portfolio-Initial Class was renamed ING JPMorgan Fleming International Portfolio as of 12/16/2002.
3 The 7-day annualized Subaccount yield as of 12/31/2002 is 0.29%. The current yield reflects the deduction of all charges under the Contract that are deducted from the total return quotations shown. The current yield more closely reflects current earnings.
4 Performance as of 11/30/2002
IMPORTANT NOTE: The information presented in this newsletter is not intended as investment advice. Its purpose is to help you understand the investment choices available through the State of Connecticut's Deferred Compensation Plan. Your financial strategy and investment choices are entirely your own and should reflect your personal needs and circumstances.
State of Connecticut personnel, including the Human Resources Department staff, cannot provide investment advice. For more information, you may want to consult with a professional financial advisor.
The investment information is current as of December 31, 2002.