Russell develops individually tailored target-date strategy

Russell Investments on Tuesday unveiled Russell Adaptive Retirement Accounts, individually tailored target-date investment options for institutional defined contribution plans.

The strategy is designed to create a tailored glidepath of optimal asset allocations for individual participants using a number of factors beyond age.

It is unlike a target-date fund, which is by definition, a one-size-fits-all approach, said Dick Davies, managing director, defined contribution, in a telephone interview. The adaptive retirement accounts use an automated methodology, with existing record-keeper data, to tailor the account for an individual, considering several factors including age, savings deferral rate, current account balance, salary and defined benefit pension income.

Josh Cohen, defined contribution practice leader, said the new strategy is a natural expansion for Russell, which specializes in custom target-date funds. Mr. Cohen added the strategy occupies the “white space” between managed accounts and target-date funds.

The strategy does not require any participant involvement and would use available investment options that are already part of the plan.

“The beauty of it is its open architecture,” and plan executives still have full discretion on selecting managers and investment options, Mr. Cohen said.

The strategy was launched Tuesday, and Russell is in the process of trying to secure new clients.

Russell has $23 billion in DC assets under management.