Target Date Philosophy and Investment Process
Retirement Funds and Target Funds share common attributes with respect to philosophy, process, and people—all of which are supported by a proprietary global research platform.
At the highest level, we believe that retirement accounts are designed to help achieve two primary goals:
Accumulation of wealth prior to retirement
Conversion of wealth to income during retirement
The risk of outliving retirement assets should be the key driver of managing retirement portfolios.
Maintain adequate equity allocations based on proprietary asset allocation modeling and research.
Time horizons should drive asset allocation throughout an investor's life.
Allocations continue to shift for 30 years after the target retirement date.
Active management, coupled with modest tactical asset allocation shifts, can help to enhance long-term performance.
Opportunity for outperforrmance over time. Potential to strategically adjust equity and fixed income allocations during bull and bear markets.
Process & People
The investment process for our target date solutions reflects the firm's broader investment culture - a commitment to fundamental research and close collaboration among seasoned professionals that allows us to deliver investment management excellence.
This process begins with the firm's Asset Allocation Committee - a team of senior investment professionals that helps to guide and manage all of the firm's asset allocation portfolios. The committee approves all strategic and tactical asset allocation changes for our suite of target date solutions.
The target date portfolio management team implements the Asset Allocation Committee's recommendations for each of the firm's target date solutions and is responsible for the day-to-day management, ongoing research, and oversight of these products.
Asset Allocation Committee
Asset allocation decisions are made by the firm's Asset Allocation Committee, which includes some of the firm's most senior investment management professionals.
- Years at T. Rowe Price 7
- Years investment experience 24
Target Date Portfolio Management Team
Implements the Asset Allocation Committee's recommendations for each target date solution and conducts ongoing research for all of T. Rowe Price's asset allocation products.
- Years at T. Rowe Price 23
- Years investment experience 25
- Years at T. Rowe Price 23
- Years investment experience 23
- Years at T. Rowe Price 22
- Years investment experience 20
Our Target Date solutions are composed of a complementary range of diversified T. Rowe Price investment strategies. Highly experienced portfolio managers represent these distinct investment strategies.
- Average years at T. Rowe Price17
- Average years investment experience22
Global Research Platform
T. Rowe Price's global research team supports the investment process through rigorous fundamental analysis
- Equity Analysts196
- Fixed Income Analysts88
Fundamental, proprietary research is integral to the investment management process for our target date solutions.
- Knowledge gathered through on-site company visits; conversations with company management; and meetings with suppliers, competitors, distributors, and clients.
- Rigorous fundamental analysis at regional, sector, industry, and company levels.
- Insights shared across investment styles and strategies, allowing portfolio managers to quickly identify and pursue opportunities for clients.
A byproduct of our research approach is that the portfolio management team enjoys real-time holdings transparency for each of the investment strategies underlying our target date solutions. We believe this transparency helps promote both style consistency and long-term investment success.
The principal value of the Retirement Funds and Target Funds (collectively, the “target date funds”) is not guaranteed at any time, including at or after the target date, which is the approximate year an investor plans to retire (assumed to be age 65) and likely stop making new investments in the fund. If an investor plans to retire significantly earlier or later than age 65, the funds may not be an appropriate investment even if the investor is retiring on or near the target date. The target date funds' allocations among a broad range of underlying T. Rowe Price stock and bond funds will change over time. The Retirement Funds emphasize potential capital appreciation during the early phases of retirement asset accumulation, balance the need for appreciation with the need for income as retirement approaches, and focus on supporting an income stream over a long-term retirement withdrawal horizon. The Target Funds emphasize asset accumulation prior to retirement, balance the need for reduced market risk and income as retirement approaches, and focus on supporting an income stream over a moderate postretirement withdrawal horizon. The target date funds are not designed for a lump-sum redemption at the target date and do not guarantee a particular level of income. The key difference between the Retirement Funds and the Target Funds is the overall allocation to equity; although they each maintain significant allocations to equities both prior to and after the target date, the Retirement Funds maintain a higher equity allocation, which can result in greater volatility over shorter time horizons.