Wells Fargo is rolling out a new line of target-date funds that deploy actively managed strategies, the latest indication that the TDF market is evolving to address concerns that a fixed glide path strategy may expose some investors to too much risk as retirement nears.
The new line—The Wells Fargo Dynamic Target Date Fund—will deploy proprietary risk management strategies, making for a more responsive option to market volatility relative passively managed TDFs, which automatically rebalance equity and fixed-income ratios relative to a set glide path, and not market conditions.
Wells is banking that those strategies will help capture opportunities in equity markets, while managing against short-term market gyrations, and ultimately position savers closer to the goal of replacing 80 percent of their income in retirement, an objective that Wells Fargo research says incumbent TDF strategies have failed to do.
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