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T. Rowe Cuts Fees on TDFs, Plans New Lineup

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T. Rowe Price will cut expenses on all target date mutual funds and trusts starting July 1, the fund group said Monday.

The resulting asset-weighted average fee reduction is 6.3 basis points for its TDFs and 4.8 basis points for TDF trusts; specific fee changes will vary across products.

T. Rowe Price also has filed a registration statement for a new lineup of TDFs, which it is calling its “Retirement Blend Funds,” with the Securities and Exchange Commission. It expects to make these new funds available to investors on or about July 28 as Investor Class and I Class shares from 2005 through 2065.

“We understand everyone’s path to retirement is different, and we look forward to delivering greater choice and value to the target date marketplace through these lower fees and the new Retirement Blend Funds,” said Wyatt Lee, head of Target Date Strategies, Multi-Asset, in a statement.

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Monday’s developments follow T. Rowe Price’s move last April to employ “a new unitary fee structure” for all its TDFs, which resulted in fee reductions across the Retirement I Funds — I Class, Target Funds, and Retirement Income 2020 Fund.

This top-down fee structure has enabled the firm to lower target date mutual fund fees “without making underlying fund or allocation changes,” it said Monday.

As for its new Retirement Blend Funds, T. Rowe Price plans to “combine active and passive styles in selecting underlying investments” to reach “a wider range of investors for whom a mutual fund is the preferred or most appropriate investment vehicle.”

The firm’s target date portfolios will continue to be managed by Lee, CFA, as well as portfolio managers Kimberly DeDominicis and Andrew Jacobs van Merlen, CFA.