Magazine article American Banker

Target Date Fund Growth Exploding at State Street

Magazine article American Banker

Target Date Fund Growth Exploding at State Street

Article excerpt

State Street Corp. has had heavy inflows into its target date funds as interest in a packaged retirement product has increased.

The Boston company's Target Retirement Strategy funds, launched in January 2005 and managed by State Street Global Advisors Inc., have increased their assets under management to $3.5 billion as of June 30, from $183 million in June 2005.

Target date, or life cycle, funds are designed for defined-contribution plans and become more conservative as an investor approaches retirement.

Analysts said the funds are popular with investors who want to set their investment strategy and forget it. Participants choose a fund that matures closest to their retirement. The funds are designed to eliminate the confusion investors feel when faced with numerous fund options in a 401(k) plan. The mix of cash, bonds, and stocks in each fund is based on the years until retirement.

Pentegra Retirement Services of White Plains, N.Y., said Monday that it has added State Street's target date funds to the array of funds available in its defined-contribution plans.

Gwen Burrough, the chief marketing officer for Pentegra, said that target date funds have gained popularity because they are simple and well diversified.

Pentegra, which oversees the retirement programs of more than 500 community banks and other businesses, selected State Street's funds because they carry lower charges than other target date funds, Ms. Burrough said.

Several companies have launched or relaunched such funds. …

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