The path to retirement is different for everyone, which makes understanding a plan sponsor’s unique objectives and evaluating the trade-offs between active and passive management strategies essential when selecting a target date offering.
“We believe, for most clients, retirement isn’t passive, and their investment manager shouldn’t be either,” says Michael Doshier, Senior Defined Contribution Advisor Strategist for T. Rowe Price. “To achieve the level of diversification across asset classes that is in the best interests of long-term investors, you need some active management. Still, passive strategies can be used for lower costs and to achieve efficient, broad exposure to certain asset classes and can make sense to include within some solutions.”
T. Rowe Price launched a blend mutual fund series with underlying investments that are a mix of active and passive investment strategies.
“The Retirement Blend Funds represent an extension of our target date offerings,” says Kathryn Farrell, Portfolio Specialist for T. Rowe Price’s Multi-Asset Division. “While all of our retirement solutions use active management to seek opportunities in an effort to drive outcomes, the Retirement Blend series leverages a higher level of passive management to help reduce overall costs.”
Listen to the podcast to learn more about this blended approach and how T. Rowe Price determines when to use active vs. passive management.
T. Rowe Price Investment Services, Inc.