Close Close

Portfolio > Portfolio Construction

T-Rowe Price Introduces New Target Date Retirement Options: Portfolio Products

Your article was successfully shared with the contacts you provided.

T-Rowe Price made enhancements to its target date retirement product portfolios that it said are “designed to help improve retirement outcomes and address the headwinds investors face in achieving retirement security, including longevity risk, inflation risk, and market risk.”

As part of what it called the “next evolution” of target date retirement products, the firm said that, “over a two-year period” starting this April, it plans to “gradually increase” equity exposure in the Retirement and Target portfolios’ glide paths early in the accumulation years and post-retirement and add emerging markets and U.S. large-cap core equity strategies to further diversify the underlying investments.

T-Rowe Price will raise the equity allocation of the retirement glide path at the start of the investing lifecycle (30 or more years from retirement) to 98% equity from the current 90% equity. The firm will also: Hold the 98% equity allocation constant until 30 years from retirement; maintain a 55% equity allocation at retirement; and raise the equity allocation after retirement, reaching a final 30% equity allocation 30 years after retirement, an increase from the current 20% allocation, it said.

For the target glide path, the company will boost the equity allocation of the glide path at the start of the lifecycle to 98% equity from the current 90% and also: Hold the 98% equity allocation constant until 35 years from retirement; maintain a 42.5% equity allocation at retirement; and raise the equity allocation after retirement, reaching a final 30% equity allocation 30 years after retirement, up from 20% now, it said.

The firm also added two investment strategies to the underlying building blocks of several target date products, it said. Emerging Markets Discovery Stock will be added to all the firm’s target date strategies, while U.S. Large-Cap Core will be added mainly to actively managed strategies, it noted.

Bloomberg, MSCI Widen ESG Fixed Income Index Suite

Bloomberg and MSCI expanded the Bloomberg Barclays MSCI ESG Fixed Income Index suite with the global launch of nine environmental, social and governance high-yield indexes. The new indices incorporate ESG considerations in underlying fixed income indexes and are co-branded as the Bloomberg Barclays MSCI ESG High Yield Indices.

The family of high-yield bond benchmarks include three variants for the U.S., Pan-Euro and global markets: The Bloomberg Barclays MSCI High Yield SRI Indices, Bloomberg Barclays MSCI High Yield Sustainability Indices and Bloomberg Barclays MSCI High Yield ESG Weighted Indices.

The Bloomberg Barclays MSCI High Yield SRI Indices were “designed to exclude issuers with substantial revenue derived from sources such as adult entertainment, alcohol, gambling, tobacco, controversial military weapons, civilian firearms, nuclear power, and genetically modified organisms,” Bloomberg and MSCI said.

The Bloomberg Barclays MSCI High Yield Sustainability Indices, meanwhile, were designed to include issuers with higher MSCI ESG Ratings and the Bloomberg Barclays MSCI High Yield ESG Weighted Indices were designed to use MSCI ESG Ratings to adjust issuer market weights, the companies said.

The Bloomberg Barclays MSCI ESG Fixed Income Index suite, which includes a variety of investment-grade, aggregate, corporate index and now multi-currency, high-yield benchmarks, is available for investors via the Bloomberg Terminal.

New Index Provider Introduces Its First Index ETF

New index provider Armor Index launched the Armor US Equity Index ETF (ARMR) in conjunction with Exchange Traded Concepts, which is serving as the exchange-traded fund’s advisor.

The new ETF, the Atlanta-based firm’s first product since being founded in 2019, has a net expense ratio of 0.60% and is trading on the New York Stock Exchange Arca.

Armor Index is positioning itself as a provider of indexes that it said are “designed to protect against downside risk across a number of asset classes.” With ARMR, the firm is looking to “provide investment returns that, before fees and expenses, correspond generally to the total return performance” of its own Armor US Equity Index, it said.

Rebalanced monthly, the index provides exposure to those sectors of the U.S. economy that the firm said “score the highest using Armor’s proprietary market performance indicator,” which identifies the sectors “best positioned to offer strong, long-term performance potential with lower expected downside risk.”

Only the sectors that score well in the MPI are included each month, represented by using “highly liquid” sector ETFs, the firm said. If no sector appears attractive based on the MPI results, the index can shift to a focus on U.S. Treasurys, it noted.

AssetMark Adds 3 New Portfolio Management Solutions

Three new portfolio management solutions were added to AssetMark’s platform, the firm said. The additions of American Funds Retirement Income Portfolio Series, Dorsey Wright Tactical Fixed Income and Pimco Tactical Income Focus “will enable advisors to diversify and complement their clients’ portfolios in the accumulation and retirement phases of their lives,” according to the Concord, California-based firm.

The American Funds Retirement Income Portfolio Series will help advisors “serve their clients as they move into the income and distribution phase of life,” according to David McNatt, senior vice president of product strategy and management at AssetMark.

The Dorsey Wright and Pimco fixed income strategies, meanwhile, “will help advisors diversify client fixed income portfolios, navigate challenging fixed income markets, and remain focused on helping their clients achieve their long-term financial goals,” he said in a statement.

New App Makes It Easier for Families to Save for College

RIA UNest launched a free consumer finance mobile app on the Google Play Store for Android mobile devices that it said was designed to make it easier for families to save for education.

The app, also called UNest, had already launched on the iOS App Store for Apple mobile devices in 2018. Expanding the app to Android devices was the next logical step. After all, UNest said that operating system holds a 52% market share of mobile operating systems within the U.S.

“UNest simplifies the process of registering for a 529 plan, removing the hours of paperwork required,” the company said. Via the app, parents set up a tax-efficient account that “aligns investment options with the age of the child in just five minutes,” it said. UNest users pay $3 a month. The app also provides investors 24/7 financial advice and “takes away the hassle of managing 529 plans,” according to the company.

UNest has been adding new enhancements to the app in recent months, it noted, adding it recently made a 529 rollover feature available to iOS and Android users. Account owners can now “easily roll their existing 529 account into UNest to take advantage of cost savings and ease of account management,” it said.

Grapevine6 Teams With Rudin Group

Grapevine6, a social and digital sales engagement platform, says it is now partnering with the wealth marketing firm Rudin Group, led by April Rudin. Grapevine6’s mobile app uses artificial intelligence to recommend the most relevant and compliant articles for advisors to share via social media.

Grapevine6, used by some of the largest firms on Wall Street, couples relevant third-party content and “automated compliance guardrails” so financial advisors can work with social media “with confidence and speed adoption,” the firm says.

With Rudin Group, the firm aims to create a content strategy to help more advisors interact with clients and prospects in social and digital channels. “In order to be effective, the content strategy must have a digital-first orientation,” it explained in a statement.

“Forward looking financial services firms are prepared to leverage the intersection of wealth transfer, millennial mindset and technology solutions. Grapevine6 helps large enterprise firms solve for all of that in one innovative platform,” Rudin said in a statement.

— Check out last week’s portfolio product roundup here: Barclays Introduces 10-Year Bear ETNs: Portfolio Products