Custom target-date funds (TDFs) continue to rise in popularity within defined contribution (DC) plans, but their seemingly complex process often keep advisors at bay. We believe that semi-custom TDFs, which leverage recordkeeper technology and administrative capabilities, may be the most viable approach to support customization.
We expect that custom models will be the new “norm” when prescribing target-date funds. Fiduciary regulations only continue to fuel this growth. Early adopters of custom and semi-custom models may gain competitive advantages over their peers. It’s not too early to start learning about semi-custom TDFs and the recordkeeper technologies that support customization.
Why Consider Custom Models?
|Why Consider Custom Models?||1:38|
|The Rise of Custom Target Date Funds||2:23|
|Recordkeeper Reaction To The Custom Model Trend||2:40|
|Understanding The Benefits Of Custom TDFs||2:52|
How to Construct Models
Scaling Custom Models for Your Practice
|Implementing Custom TDFs||1:09|
|The Importance Of Selecting Glide Paths||4:23|
|How Do You Communicate The Value Of Custom Models To Participants?||2:12|
|Empower- Does Morningstar Act As A Fiduciary?||0:53|
|Empower- Can Additional Asset Classes Be Added To A Model?||2:13|
|Empower- Who is Responsible For Performance And How Is It Provided?||2:01|
|How Do You Calculate Performance On A Model?||0:57|
OppenheimerFunds does not recommend any specific asset allocations.
Discussion of risk-based models is not intended to represent investment advice that is appropriate for all investors. Each investor’s portfolio must be constructed based on the individual’s financial resources, investment goals, risk tolerance, investing time frame, tax situation and other relevant factors.
The date in a target date fund’s name refers to the approximate year when an investor in the portfolio is assumed to retire and likely would stop making new investments in the portfolio, and may plan to start withdrawing money. Using an asset allocation “glide path,” (how the asset allocation changes as the target date nears) the portfolios generally become progressively more conservative until and after the approximate date of an investor’s “transition” into retirement. An investment, including the principal value, in a target date fund is not guaranteed and a portfolio can suffer losses, including losses near, at, or after the transition date, and there is no guarantee that a portfolio will provide adequate income at and through the investor’s retirement.
These views represent the opinions of OppenheimerFunds, Inc. and are not intended as investment advice or to predict or depict performance of any investment. These views are subject to change based on subsequent developments.
For Institutional Use Only. This material has been prepared by OppenheimerFunds Distributor, Inc. for institutional investors only. It has not been filed with FINRA, may not be reproduced and may not be shown to, quoted to or used with retail investors.