Bonds: Total Market

State Street Global Advisors has launched a new series of target date funds—called the Target Retirement IndexPlus Strategy—that includes a 10% allocation to private markets managed by Apollo. 

 

These funds, structured as collective investment trusts (CITs), pair State Street’s index strategies for public markets with Apollo’s evergreen fund providing exposure to private credit, equity, and real assets. Brendan Curran of State Street likens this evolution to shifting into a new gear in retirement investing, acknowledging the growing significance of private assets in diversified portfolios. 

 

The collaboration follows earlier efforts between State Street and Apollo, including the launch of a private credit ETF. Apollo views this as part of its broader push to tap into the wealth management space and expand access to private investments, aiming to grow its assets in this segment to $150 billion by 2029. 


Finsum: The launch reflects a broader trend of asset managers integrating private markets into retirement solutions to meet demand for diversification and improved outcomes.



Closed-end funds (CEFs) can be valuable additions to a diversified portfolio, offering the potential for capital growth and income through both investment performance and regular distributions. 

 

Unlike open-end mutual funds, CEFs typically provide higher distribution rates, often paid monthly or quarterly, and allow reinvestment that may enhance long-term returns.  Their fixed-share structure after IPOs means managers aren’t forced to hold cash for redemptions, allowing for more efficient and fully invested portfolios. 

 

CEFs also give investors exposure to the illiquidity premium by enabling access to less liquid, potentially higher-yielding investments that open-end funds often avoid. 


Finsum: Many CEFs may use leverage to try to boost returns, though this adds risk and volatility.

Target-date funds offer a hands-off approach to retirement investing by automatically adjusting asset allocations over time. These funds balance growth and security by shifting from stock-heavy portfolios in early years to safer investments like bonds as retirement nears. 

 

Named for the investor’s target retirement year, these funds simplify decision-making and are commonly found in employer-sponsored 401(k) plans. A key factor in choosing one is its “glide path,” which determines whether asset adjustments stop at retirement or continue for years beyond. 

 

While convenient, investors should compare expense ratios and investment strategies to ensure alignment with their risk tolerance. Three TDF funds to consider are: 

  1. Vanguard Target Retirement 2045 Fund Investor Shares (VTIVX) – Expense Ratio: 0.08%
  2. Fidelity Freedom Index 2045 Fund Investor Class (FIOFX) – Expense Ratio: 0.12%
  3. T. Rowe Price Retirement 2045 Fund (TRRKX) – Expense Ratio: 0.62%

Finsum: Despite their “set it and forget it” appeal, periodic reviews help maintain a well-balanced portfolio.

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