More than half of all target-date fund managers surveyed by Callan Associates have made glidepath adjustments, compared with just over a third two years ago.
Callan said 58% of target-date fund managers changed glidepaths based on their most recent evaluation, up from 34.5% in 2009, the consultant said in a news release.
“Spurred by inflation concerns, the most noteworthy change involved the incorporation of inflation-sensitive assets into the glidepath fund lineup — with the majority maintaining exposure to a combination of” TIPS; U.S., international and global REITs; commodities and/or diversified real estate, the news release said.
“Allocations to inflation-sensitive securities and other diversifiers remain generally modest,” Lori Lucas, executive vice president and defined contribution practice leader at Callan, said in the release. “Often the target-date managers are just dipping their toes in the water when it comes to commodities and alternatives; even REITs and TIPS allocations tend to be small.”
Fund managers also are trying to diversify within asset classes and to reduce volatility by adding, or increasing exposure to, investments in international or emerging markets as well as in mortgage funds, global bonds and senior loans, according to the release.
The online surveys this year and in 2009 are the only two detailed surveys conducted by Callan on target-date strategies and practices, said Nancy Malinowski, Callan spokeswoman. The latest survey covered 26 fund managers providing 35 separate target-date fund series with aggregate assets of $375 billion.