Core Insights - The article highlights the significant retirement savings shortfall faced by many Americans, with 47% of working-age households at risk of not having enough saved for retirement [4][7] - The traditional three-legged stool of retirement funding—Social Security, employer pensions, and personal savings—has shifted, leaving many reliant solely on Social Security and personal savings due to the decline of pensions [2] Group 1: Retirement Savings Shortfall - A substantial portion of the population is aware of the retirement crisis, with 79% of Americans acknowledging the issue in 2024 [4] - The risk of falling short on retirement savings spans all income levels: 56% of lower-income, 45% of middle-income, and 41% of high-income workers are at risk [5] Group 2: Strategies to Avoid Shortfall - Setting a clear retirement savings goal is essential, with a recommendation to save around 10 times the final salary, adjusted for factors like inflation and healthcare costs [6][8] - Choosing the right retirement account is crucial, with suggestions to maximize employer 401(k) matches and consider traditional or Roth IRAs based on current and future tax rates [8] - Automating contributions to retirement accounts can enhance saving consistency and help meet targets [8] - Smart investment choices, such as ETFs and target date funds, are recommended to balance risk and potential returns while being mindful of investment fees [8] - Increasing investment contributions in line with income raises can help individuals stay on track with their retirement savings goals [8]

Core Insights - Older Americans hold a larger share of stocks than they desire, which may ultimately benefit them [1][5] - There is a discrepancy between older Americans' pessimistic views on the stock market and historical performance data [2][5] - Actual stock allocations for older investors are significantly higher than their stated preferences, with 43% to 48% of portfolios invested in stocks compared to a desired allocation of 37% [3][4] Group 1 - Research indicates that about 60% of older Americans expect the stock market to rise, while historically, the market has increased approximately 75% of the time [2] - The Center for Retirement Research suggests that the higher actual stock holdings may be influenced by default allocations in 401(k) plans, particularly target date funds [5] - Financial advisors support the notion that maintaining higher equity allocations is crucial for retirees, given rising living expenses and life expectancy [6] Group 2 - The trend of older Americans holding more equities represents a shift from traditional practices where retirees favored fixed income products to preserve their savings [7] - Advisors emphasize the importance of guiding clients towards appropriate investment strategies, as many may not fully understand their optimal asset allocation [6]

Financial Data and Key Metrics Changes - Adjusted earnings per share for Q1 2025 was $2.23, down from $2.38 in Q1 2024 but up from $2.12 in Q4 2024 [21] - Q1 2025 adjusted net revenue was $1.8 billion, a slight increase from Q1 2024 but down 3.6% from Q4 2024 [23] - Net outflows for the quarter were $8.6 billion, primarily driven by U.S. equities and rebalancing activity [21] Business Line Data and Key Metrics Changes - Target date franchise saw net inflows of $6.3 billion, led by blend products [22] - Fixed income had strong net inflows of $5.4 billion, mainly from institutional clients [22] - ETF business achieved net inflows of $3.26 billion, with eight ETFs each receiving over $100 million in inflows [22] Market Data and Key Metrics Changes - 99% of target date assets outperformed their peer group over three, five, and ten-year periods [10] - 60% of funds beat their peer groups across one, three, five, and ten-year timeframes [8] - Mixed results were observed in alternative portfolios, with private lending strategies generating the strongest gains [12] Company Strategy and Development Direction - The company is expanding its retirement solutions internationally, including partnerships in Japan and Korea [12][13] - Focus on enhancing ETF offerings and integrating strong equity research with hedging strategies [14] - Continued emphasis on managing expenses while investing in strategic initiatives [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged policy-driven market volatility affecting assets under management and revenues [7] - The outlook for 2025 remains largely unchanged, with expectations for improved flows relative to 2024 [58] - Management is optimistic about the growth potential in ETFs and private market alternatives [35][53] Other Important Information - The company maintains a strong balance sheet with $3.3 billion in cash and discretionary investments [19] - A quarterly dividend of $1.27 was announced, marking the 39th consecutive year of increases [19] - The company is recognized for its workplace culture and investment performance, receiving multiple accolades [16][17] Q&A Session Summary Question: ETF business growth and future opportunities - Management expressed excitement about the ETF business, highlighting strong performance and plans for future offerings [30][31] Question: Update on private lending and O Credit - Management noted $20 billion in private market alternatives, with O Credit seeing slower growth but potential for improvement [42][44] Question: Access to private market alternatives in retirement plans - Management indicated that private market alternatives will eventually gain access to defined contribution plans, but the timing is uncertain [48][53] Question: Flows and sales momentum outlook - Management reported that the flow outlook for the year is largely unchanged, with expectations for improvement in 2025 [58][61] Question: Fee rate dynamics - Management explained that the decrease in effective fee rate was driven by structural shifts towards lower-cost vehicles [65] Question: Expansion of retirement solutions outside the U.S. - Management detailed various international partnerships and the tailored approach to retirement solutions in different markets [72][75]

Financial Data and Key Metrics Changes - Adjusted earnings per share for Q1 2025 was $2.23, down from $2.38 in Q1 2024 but up from $2.12 in Q4 2024 [18] - Q1 2025 net outflows were $8.6 billion, primarily driven by U.S. equities and rebalancing activity [18] - Adjusted net revenue for Q1 2025 was $1.8 billion, marginally increasing from Q1 2024 but down 3.6% from Q4 2024 [20] - Adjusted operating expenses for Q1 2025 totaled $1.1 billion, a 7.4% increase from Q1 2024 [22] Business Line Data and Key Metrics Changes - Target date franchise had net inflows of $6.3 billion, led by blend products [19] - Fixed income saw strong net inflows of $5.4 billion, primarily from institutional clients [19] - ETF business achieved net inflows of $3.26 billion, with eight ETFs each having inflows over $100 million [20] Market Data and Key Metrics Changes - The effective fee rate for Q1 2025 was 40 basis points, declining from the prior quarter and Q1 2024 due to a mix shift in assets [21] - Equity assets under management decreased from 52% to 49% of total AUM, while fixed income and multi-asset increased [63] Company Strategy and Development Direction - The company is expanding its retirement strategies beyond the U.S., including partnerships in Japan and Korea [10][11] - Focus on enhancing ETF offerings and building a robust pipeline of new products [12][36] - The company aims to leverage its capabilities in private market alternatives to meet growing client demand [49][85] Management's Comments on Operating Environment and Future Outlook - Management acknowledged policy-driven market volatility impacting assets under management and revenues [6] - The outlook for 2025 remains largely unchanged, with expectations for improved flows relative to 2024 [55] - Management is cautious about the competitive landscape in private lending and alternative investments [40][46] Other Important Information - The company maintains a strong balance sheet with $3.3 billion in cash and discretionary investments [16] - A quarterly dividend of $1.27 was announced, marking the 39th consecutive year of increases [16] - The company is being thoughtful about controllable expenses while investing in strategic initiatives [16] Q&A Session Summary Question: Steps to drive ETF success and future opportunities - Management highlighted strong performance, scaling products, and investment in sales capabilities as keys to ETF success [28][30] Question: Update on private lending and investor appetite - Private market alternatives total approximately $20 billion, with OHA seeing $54 million in flows for the quarter [40] Question: Potential for alternative investments in U.S. retirement channels - Management believes there will eventually be access to private market alternatives in defined contribution plans [45] Question: Flows and sales momentum outlook - The flow outlook for the year is largely unchanged, with expectations for improvement relative to 2024 [55] Question: Fee rate dynamics and future expectations - The decrease in effective fee rate was driven by structural shifts towards lower-cost vehicles [62] Question: Capital allocation and inorganic growth opportunities - The company is considering share buybacks and M&A opportunities, particularly in private market alternatives [81][85]

Market Overview - The Nasdaq Composite has experienced a decline of over 10% from its peak, entering correction territory [1] Investment Opportunities - Corrections are viewed as buying opportunities, particularly for dividend-paying stocks [2] - Three Nasdaq-listed dividend stocks are highlighted for potential investment: Broadcom, PepsiCo, and T. Rowe Price [2] Broadcom (AVGO) - Broadcom's stock has decreased by approximately 25% from its peak, resulting in a dividend yield of around 1.3% [3] - The company has a strong track record of dividend growth, with an 11% increase last year, marking 14 consecutive years of growth and an overall increase of 8,330% during this period [4] - Demand for Broadcom's semiconductors is driven by artificial intelligence, with AI revenue increasing by 220% to $12.2 billion last year [5] PepsiCo (PEP) - PepsiCo's shares are about 15% below their 52-week high, maintaining a dividend yield of approximately 3.5% [6] - The company plans to raise its dividend by 5% later this year, marking the 53rd consecutive year of dividend increases, placing it among the elite Dividend Kings [7] - PepsiCo has a strong financial position, generating significant cash flow and targeting high-single-digit earnings-per-share growth over the long term [8] T. Rowe Price (TROW) - T. Rowe Price's shares have fallen over 20% from their 52-week high, resulting in a dividend yield exceeding 5% [9] - The company raised its dividend by 2.4% last month, extending its growth streak to 39 years [9] - T. Rowe Price's assets under management (AUM) increased by 11.2% to $1.6 trillion, contributing to a more than 20% rise in earnings per share last year [10] Future Outlook - The Nasdaq's decline may impact T. Rowe Price's AUM in the short term, but recovery is expected during the next market rally [11] - A list of high-quality dividend stocks, including Broadcom, PepsiCo, and T. Rowe Price, is being compiled for potential purchases if prices decline further [12]