AllianceBernstein will close and liquidate its AB Retirement Strategies target-date fund series in November as it changes focus to a new multimanager series, AB Select Multi-Manager Retirement Funds, from its current single-manager offering. Both of the series are mutual-fund based.
The decision reflects the company's evolving target-date strategy that emphasizes using a multimanager approach, “which we think is a better solution,” said Richard Davies, senior managing director for defined contribution.
The company also introduced in June a collective investment trust-based target-date series, the AB Multi-Manager Retirement Trusts, featuring multiple managers.
The single-manager AB Retirement Strategies series was started in 2005 and has about $1.1 billion in assets. It is managed by AllianceBernstein. All underlying assets are actively managed.
The AB Select Multi-Manager Retirement Funds series was unveiled in January. It has about $41 million in assets and it features an 80% active-20% passive allocation.
The passive allocation is managed through exchange-traded funds; 30% is actively managed by AllianceBernstein; and 50% is actively managed by Morningstar Associates. Morningstar selects investments from five managers, including AllianceBernstein.
A March 31 report by Morningstar said the long-term risk-adjusted returns for the single-manager series “rank among the target-date industry's worst, and assets have poured out accordingly.”
According to Morningstar, the series “has seen net outflows in every calendar year since 2010. While the markets have charged ahead over the last five years, this series' asset base has nearly halved.”
