For more stories like this, sign up for the PLANADVISERdash daily newsletter.
Products September 26, 2013
Fidelity Readjusts TDF Strategy
Fidelity Investments said it would readjust glide paths and asset-allocation strategies
for its Freedom Fund product line in an attempt to improve TDF outcomes.
Reported by John Manganaro
The strategy change will take into account new investor demographics and behaviors derived from Fidelity’s recordkeeping database of 12 million retirement plan participants, as well as updated capital markets assumptions and enhanced loss-recovery and risk analysis.
Investment managers, under the new strategy, will seek to increase equity allocations across most of the firm’s dated portfolios, with a proportional decrease in other asset classes, notably short-term debt.
Fidelity Investments, which began offering TDF products in 1996, currently manages more than $170 billion in TDF assets on behalf of 6.5 million investors. The company’s newest move will result in changes to how those assets are distributed among domestic equity funds, international equity funds, bond funds, and short-term funds.
“Given the shifting dynamics in the marketplace and our experience managing multi-asset class portfolios through a range of market cycles for varying investor needs, we believe the enhancements ensure our best thinking is being applied to the investment process,” Derek L. Young, president of Fidelity’s global asset-allocation division, said in a statement.
More details about the new strategy can be read here.