Hewitt EnnisKnupp plans to launch a very small family of new target-risk funds in the “imminent” future, said Kevin Vandolder, partner and defined contribution specialist.
HEK's defined contribution consulting staff collaborated with the firm's investment management team to develop four multimanager, multiasset-class funds: growth, income, inflation and capital preservation.
The simple descriptive names are designed to make it easier for defined contribution plan participants to understand and invest in the funds, said Matthew Clink, partner and U.S. head of portfolio management.
The objective-based funds are designed to control the risks that participants face at different stages of their careers to achieve retirement income adequacy, Mr. Clink said.
The fund family is designed to be a series of consecutive investments for defined contribution plan participants as their career and retirement progresses.
“By reducing the number of investment options from 20 or 25 funds to four funds with sensible names that describe what they do, the design should help to solve behavioral tendencies that lead participants to make investment mistakes,” Mr. Clink said.
HEK manages $35 billion in delegated investment strategies, said MacKenzie Lucas, a company spokeswoman.