A Panel of TIAA-CREF Portfolio Managers: Who s Managing Your Money? April 14, 2011

Transcription

1 A Panel of TIAA-CREF Portfolio Managers: Who s Managing Your Money? April 14, 2011

2 Disclosure You should consider the investment objectives, risks, charges and expenses carefully before investing. Please call or go to for a current prospectus that contains this and other information. Please read the prospectus carefully before investing. TIAA-CREF products may be subject to market and other risk factors. See the applicable product literature or visit tiaa-cref.org for details. Funds that invest in foreign securities are subject to special risks, including currency fluctuation and political and economic instability. TIAA-CREF Asset Management is a division of Teachers Advisors, Inc., a registered investment advisor and wholly owned subsidiary of Teachers Insurance and Annuity Association (TIAA). TIAA-CREF personnel in its investment management area provide investment advice and portfolio management services through the following entities: Teachers Advisors, Inc., TIAA-CREF Investment Management, LLC, and Teachers Insurance and Annuity Association. TIAA-CREF Individual & Institutional Services, LLC and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products Teachers Insurance and Annuity Association-College Retirement Equities Fund, 730 Third Avenue, New York, NY C

3 Panelists Moderator: Sheryl Hempel Managing Director, TIAA-CREF Panelists: Bill Riegel Senior Managing Director, TIAA-CREF John Cunniff Managing Director, TIAA-CREF 3

4 Bill Riegel, Senior Managing Director Active Equity

5 Our Research Advantage Our equity investment process is driven by a centralized team of global research analysts. They provide us with an information advantage to pick the right stocks. EQUITY RESEARCH ANALYSTS PORTFOLIO MANAGERS 39 analysts with an average of 13 years of investment experience In-depth knowledge of sectors, industries and companies around the world Our research analysts manage participant funds 31 portfolio managers averaging 18 years of investment experience: - 16 active portfolio managers - 15 quantitative managers A broad mix of investment styles and strategies Wide range of geographical expertise and focus 5

6 Disclosure The performance data quoted represents past performance and is no guarantee of future results. Your returns and the principal value of your investments will fluctuate so that your shares [accumulation units], when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted above. For performance current to the most recent month-end, visit the TIAA-CREF website at tiaa-cref.org or call

7 Active Mutual Fund Offerings: Example 1 TIAA-CREF International Equity Fund Fund Profile Active foreign developed markets equity strategy Total fund assets: $2.69 billion Expenses: 84 bps Performance For Periods Ending 3/31/2011* % Return t N/A Months 1 Year 3 Years 5 Years 10 Years Since Inception International Equity Fund Retirement Class Benchmark: MSCI EAFE Index Peer Group: Mngstr Foreign Lg Blend * Performance is reported net of expenses. Inception of the fund is October 1, The fund's Institutional Class began operations on July 1, Performance shown prior to the inception of the Retirement Class is based on the performance of the fund's Institutional Class. Performance has not been restated to reflect the higher expenses of the Retirement Class. If the expense differential had been reflected, performance for these periods would have been lower. 7

8 Active Mutual Fund Offerings: Example 2 TIAA-CREF Growth & Income Fund Fund Profile Active U.S. core equity strategy Total fund assets: $1.98 billion Expenses: 77 bps Performance For Periods Ending 3/31/2011* % Return Months 1 Year 3 Years 5 Years 10 Years Since Inception Growth & Income Fund Retirement Class Benchmark: S&P 500 Index Peer Group: Mngstr Lg Blend N/A * Performance is reported net of expenses. Inception of the fund is October 1, The fund's Institutional Class began operations on July 1, Performance shown prior to the inception of the Retirement Class is based on the performance of the fund's Institutional Class. Performance has not been restated to reflect the higher expenses of the Retirement Class. If the expense differential had been reflected, performance for these periods would have been lower. 8

9 Active Mutual Fund Offerings: Example 3 TIAA-CREF Large-Cap Value Fund Fund Profile: Active large capitalization value equity strategy Total fund assets: $1.89 billion Expenses: 77 bps Performance For Periods Ending 3/31/2011* % Return Months 1 Year 3 Years 5 Years Since Inception N/A Large Cap Value Fund Retirement Class Benchmark: Russell 1000 Value Index Peer Group: Mngstr Lg Value * Performance is reported net of expenses. Inception of the fund is October 1,

10 What Is the CREF Stock Account? A $108.7 billion equity fund Multimanager approach that provides diversified exposure across equity markets Research analysts, active and quantitative portfolio management Emphasis on Risk Controls Minimal bets on markets, regions, sectors and styles Minimize cash 10

11 CREF Stock Account A low-cost way to get diversified global equity exposure Composition* of CREF Stock Composite Benchmark as of 12/31/2010 (adjusted daily) Estimated Expenses**: 44bps * The data shown is provided for informational purposes only. Allocations at the time of investment may be different. ** We estimate expenses for the coming year based on projected expenses, asset levels and other relevant factors. 11

12 CREF Stock Account Performance A successful record of outperformance net of fees Performance For Periods Ending 3/31/ % Return N/A N/A Months 1 Year 3 Years 5 Years 10 Years Since Inception Stock Account Benchmark: CREF Composite* Peer Group: Mngstr Lg Cap Blend The inception date of the CREF Stock Account is August 1,

13 Unique Advantages of the CREF Stock Account Global equity allocation is embedded within the Account Minimizes risk of emotional trading in participants investment decisions Provides participants with exposure to asset classes they might otherwise overlook Assists plan sponsors in meeting their fiduciary responsibilities by providing a well- diversified, professionally managed option on plan menus Ability to annuitize earnings at retirement through lifetime income option 13

14 John Cunniff, Managing Director Lifecycle

15 Benefits of Lifecycle Products A QDIA option that enables investors to avoid common missteps Ensures that allocation choices are appropriate in relation to investment time horizon Employees select the fund that most closely matches their anticipated retirement date Manages investment costs Lifecycle products offer a single, convenient, low-cost alternative for investors who prefer to have their retirement savings professionally managed. 15

16 Retirement Savings Philosophy We believe that retirement options should be focused on helping your employees to and through retirement. Provides diversification Potentially reduces volatility Extensive emphasis on risk controls Seeks to maximize risk-adjusted returns Our goal is to replace approximately 50% of an individual s income over the course of a 30-year retirement period. 16

17 Glidepath Allocations change as investors near retirement date. Inflation-Protection Assets Short-Term Fixed Income Fixed Income International Equity US Equity The target date is the approximate date when investors plan to start withdrawing their money. The principal value of the fund(s) is not guaranteed at any time, including at the target date. 17

18 Broad Diversification - Equities Targeted exposure across regions, market caps, and investment styles to improve diversification and enhance returns Geographic Exposure U.S. Europe Russia India China Japan Hong Kong Brazil S Africa Australia U.S. Foreign Developed Foreign Emerging 18

19 Broad Diversification Fixed Income Exposure across various market segments to address changing objectives to and through retirement DIVERSIFIED CORE FIXED INCOME SHORT-TERM BONDS INFLATION-LINKED BONDS Core intermediate bonds - Broad fixed-income exposure High-Yield and Emerging Markets, Debt Reduces volatility Enhances diversification Reduces interest rate risk Enhances diversification Helps to provide a hedge against inflation - Source of diversification - Potential incremental return 19

20 Risk Management A concentrated focus on risk management drives Allocation across underlying TIAA-CREF Funds to achieve sources of excess return with low correlations Relative contribution of any one fund through correlation analysis Our goal is to achieve consistent outperformance over the long term. 20

21 Leveraging Our Strengths TIAA-CREF s expertise and discipline around the management of retirement savings is applied in our Lifecycle Funds. Focus on providing safe and secure retirements Actively participate in the national dialogue on retirement Use the full depth and scale of our asset management organization Research teams Portfolio management teams TIAA-CREF Lifecycle Funds are an efficient and convenient tool for saving to and through retirement 21

22 Lifecycle Highlights Morningstar upgraded the TIAA-CREF Lifecycle fund family to Above Average in 2010* All 10 of TIAA-CREF s Lifecycle Funds beat their Morningstar category average and their benchmarks for the 1-year time frame, ending 3/31/2011** All of TIAA-CREF s Lifecycle Funds with at least a 5-year track record beat their Morningstar category average for the 5-year period ending 3/31/2011** All 10 of TIAA-CREF s Lifecycle Funds have expense ratios that fall into the lowest (least expensive) quartile*** * Source: Morningstar. Please see slide 23 for important information. ** Source: Morningstar Direct as of March 31, Please see Slide 24 for important information. *** Source: Morningstar Direct as of December 31,

23 Morningstar Disclosures This rating applies to the Institutional Class Lifecycle funds. In addition to asset allocation risk, each Lifecycle fund is subject to the risks associated with the TIAA-CREF mutual funds held in its portfolio. These risks include market risk, company risk, foreign investment risks, emerging markets risk, growth investing risks, value investing risks, large-cap risk, small-cap/mid-cap risk, interestrate risk, index risk, and the risks of inflation-indexed bonds. Morningstar ranked Lifecycle offerings by 21 mutual fund families based on an assessment of performance, underlying fund holdings, expense ratios, glidepath construction, portfolio management and corporate governance. Morningstar uses a five point ranking scale, with Top the highest ranking. Past performance does not guarantee future results. The target date is the approximate date when investors plan to start withdrawing their money. The principal value of the fund(s) is not guaranteed at any time, including at the target date. TIAA-CREF Lifecycle Funds - Institutional class (March 31, 2011) Average Annual Returns Since Inception Date Net Expenses (2/1/11) Fund 1-Year 5-Year Since Inception % 3.72% 5.29% 1/17/ % % 3.54% 5.35% 1/17/ % % 3.19% 5.21% 1/17/ % % 2.90% 5.12% 1/17/ % % 2.48% 4.91% 1/17/ % % 2.46% 5.10% 1/17/ % % 2.58% 5.46% 1/17/ % % n/a -1.37% 11/30/ % % n/a -1.44% 11/30/ % The fund's benchmark is a weighted average of the benchmarks for each of the underlying funds in which the fund invests. The fund's target allocations to each underlying fund will change as the fund approaches its target retirement date and the benchmark weightings will change accordingly. 23

24 Lifecycle Retirement Class Performance vs. Benchmark & Morningstar Category TIAA-CREF Lifecycle Funds - Retirement class (March 31, 2011) Average Annual Returns Since Inception Date Net Expenses (2/1/11) Fund 1-Year 5-Year Since Inception Lifecycle 2010 Fund 11.44% 3.95% 5.11% 10/15/ % 2010 Fund Composite Index 10.88% 4.22% 5.36% M*Category Target Date Avg 10.44% 3.69% n/a M*Category Target Date # of Funds Lifecycle 2015 Fund 12.20% 3.72% 5.17% 10/15/ % 2015 Fund Composite Index 11.67% 3.96% 5.37% M* Category Target Date Avg 11.54% 2.83% n/a M* Category Target Date # of Funds Lifecycle 2020 Fund 13.14% 3.30% 5.04% 10/15/ % 2010 Fund Composite Index 12.50% 3.55% 5.23% M*Category Target Date Avg 12.23% 2.89% n/a M*Category Target Date # of Funds Lifecycle 2025 Fund 14.01% 2.91% 4.93% 10/15/ % 2025 Fund Composite Index 13.31% 3.51% 5.09% M*Category Target Date Avg 13.49% 2.56% n/a M*Category Target Date # of Funds Lifecycle 2030 Fund 14.79% 2.49% 4.73% 10/15/ % 2025 Fund Composite Index 14.11% 2.75% 4.95% M*Category Target Date Avg 13.75% 2.35% n/a M*Category Target Date # of Funds Lifecycle 2035 Fund 15.66% 2.50% 4.93% 10/15/ % 2035 Fund Composite Index 14.93% 2.76% 5.13% M*Category Target Date Avg 14.81% 2.16% n/a M*Category Target Date # of Funds Lifecycle 2040 Fund 15.83% 2.72% 5.28% 10/15/ % 2040 Fund Composite Index 15.07% 2.91% 5.42% M*Category Target Date Avg 14.82% 2.10% n/a M*Category Target Date # of Funds Lifecyle 2045 Fund 15.71% n/a -1.63% 11/30/ % 2045 Fund Composite Index 15.07% n/a -0.60% M*Category Target Date Avg 15.23% n/a n/a M*Category Target Date # of Funds 126 n/a Lifecycle 2050 Fund 15.83% n/a -1.70% 11/30/ % 2050 Fund Composite Index 15.07% n/a -0.60% M*Category Target Date Avg 14.97% n/a n/a M*Category Target Date # of Funds 194 n/a Lifecycle Retirement Income 10.23% n/a 2.51% 2050 Fund Composite Index 9.92% n/a 3.24% 11/30/ % M*Category Retirement Income Avg 8.75% n/a M*Category Retirement Income # of Funds 164 n/a 24

25 tiaa-cref.org * The use of this seal is not an endorsement by the HR Certification Institute of the quality of the program. It means that this program has met the HR Certification Institute s criteria to be preapproved for recertification credit. Annuity products are issued by TIAA (Teachers Insurance and Annuity Association), New York, NY Teachers Insurance and Annuity Association-College Retirement Equities Fund (TIAA-CREF), 730 Third Avenue, New York, NY C50995