Displaying items by tag: TDF

Managed accounts in defined contribution plans have long existed but suffer from low adoption, partly due to limited participant engagement. New technology now allows these accounts to personalize portfolios using more data than just age, potentially improving retirement outcomes. 

Providers are developing hybrid solutions like personalized target-date funds (PTDFs), which tailor asset allocations using existing data without requiring user input. However, experts stress that true personalization—and value—depends on incorporating outside assets and participant-provided details like retirement goals and risk tolerance. 

While artificial intelligence and subscription models may improve engagement, industry leaders see the ultimate goal as total household financial management. 

Finsum: Whether managed accounts can scale effectively and deliver on this promise remains a central question for the future of retirement planning.

Target-date funds are designed for investors with a specific retirement date in mind, automatically adjusting their investment mix to become more conservative as that date approaches. 

These funds typically hold a variety of mutual funds rather than individual stocks or bonds, making them a diversified “fund of funds” that simplifies asset allocation. Early in an investor’s career, target-date funds emphasize growth by leaning heavily on equities, then gradually shift toward bonds to preserve capital as retirement nears. 

Each fund follows a predetermined glide path, which guides the transition from aggressive to conservative investments over time. Investors benefit from a hands-off approach, as the fund handles rebalancing and risk adjustments without the need for active management. 

Finsum: Overall, target-date funds offer a convenient, age-based solution that combines diversification, risk control, and simplicity in a single investment vehicle.

Voya Financial is expanding its target-date offerings with the launch of the MyCompass Target Date Blend Series, a new collective investment trust (CIT) overseen by Great Gray Trust Company. 

This addition strengthens Voya’s foothold in the growing target-date market, where it already manages more than $25 billion in assets. Sub-advised by flexPATH Strategies, the series benefits from Voya Investment Management’s expertise as a glide path fiduciary, ensuring thoughtful asset allocation. 

Designed to complement Voya’s existing MyCompass Index and MyCompass American Funds solutions, the Blend Series mirrors the firm’s Target Retirement Trust (TRT) framework. Key features include a participant-focused glide path, a mix of active and passive strategies, a multi-manager approach for diversification, and stable value fund allocations to reduce volatility for those nearing retirement. 

Finsum: The finer details such as the glide path can make a huge difference for clients.