ucts—custom solutions are excluded—
listed starting on page 40. A slightly
expanded guide is available online.
Key to any plan sponsor due diligence
process that involves fund differentiation
is to examine the asset manager’s philosophy and methodologies, such as how he
may use passive management or unaffiliated investment managers.
About 38% of the off-the-shelf TDF
families— 28 of those listed in our guide—
use a hybrid or active/passive method of
portfolio construction. Another 28%— 21
suites—primarily use active underlying
funds, and 27%— 20 suites—favor index or
passive underlying funds. The remainder
cited something else in that field.
As to strategy, open architecture is
the presence of an unaffiliated manager
overseeing at least one part of the portfolio. Thirty-seven of the funds in the
guide now provide this feature; however,
the largest fund investment managers—
Fidelity, T. Rowe Price and Fidelity—do
not, meaning less than 25% of TDF assets
are in funds with unaffiliated managers.
Also interesting, more than half of
the products here allow the investment
manager some tactical deviation from the
glide path when the situation warrants.
Plan sponsors unable to find an
appropriate prepackaged TDF solution
among those on the following pages
might consider a custom target-date fund.
Thereby, the plan sponsor can work with
an asset manager to specify glide path
construction, underlying asset allocation and ongoing advisement. Nine asset
managers listed here provide that option.
Custom Target-Date Fund Providers
Target-Date Series Name
Customized Retirement Strategies 12 Varies MF, CIT, SA Varies $36,662 Yes
Lifetime Income Solutions 11 Client specific CIT Client specific $1,447 Yes
Allianz Global Investors
Varies – Client dependent 10 Dynamic
CIT, SA Varies $1,200 Yes
LifePath Custom 10 Client specific Client specific At TD $33,700 Varies
Birth Date Funds 11 Hybrid, multi-mgr MF, CIT, 20 years $4,399 Yes
Diversified Target Date Funds 3 Hybrid, multi-mgr MF, CIT, pvt prtnshps 15 years $964 Yes
KP Retirement Path Funds 10 Hybrid, multi-mgr All MF 5 years $6,065 Yes
J.P. Morgan Funds
Custom TDF glide path Varies Varies SA, MF, ETF Varies Varies $20,494 Yes
Retirement Vision Path Custom Funds 5 Hybrid SA, MF Varies $156 Yes
Russell Investment Management
Custom 10 Active/Passive, multi-mgr Varies AtTD $6,913 R
State Street Global Advisors
State Street custom target date Varies Varies Varies Varies $11,400 Varies
MF = Mutual fund; CIT = Collective investment trust; ETF = Exchange-traded fund; SA = Separate account; R = Not reported.
Note: Some providers entered the average number of funds in their existing custom solutions.