Insights


State Street Target Retirement Mutual Funds

Since 2005, State Street Global Advisors has brought a disciplined approach to the design and management of its suite of target date funds. Our institutional strategy has been road-tested across multiple market cycles to help meet the objectives of a broad range of participants.

This September, we celebrated our 5 year target date mutual fund track record, and are taking this moment to highlight our:

  • Strategic index investment approach
  • Fully diversified underlying fund lineup
  • Graduated glidepath
  • “Through” glidepath

 Click here for the full brochure.

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Bringing our institutional investing strategies to everyone through our target date mutual funds gives advisors and their clients easy access to sophisticated solutions. Here are four key concepts to keep in mind:

1.   Strategic Index Investment Approach

Our target date mutual funds are constructed using 11 underlying State Street index funds, which are designed to be cost efficient and style neutral. These funds are reviewed annually to evaluate the efficacy of the glidepath and the management of four key risks faced by participants: accumulation, inflation, longevity and volatility.

2.   Fully Diversified Underlying Fund Lineup

We employ a modular approach to asset allocation to help, manage risks at the top level (stocks versus bonds) and within the sub-asset classes (within stocks and within bonds). We also provide broad exposure to equity, fixed income, and inflation hedging asset classes. 

Figure 1: Following a Needs-Based Glidepath Strategy

3. Graduated Glidepath

Our graduated approach seeks to emphasize wealth accumulation for youngest participants and wealth preservation for pre-retirees/retirees through more rapid de-risking. This approach aligns with our risk reduction policy, which assumes a non-linear relationship between age and risk capacity. 

4. "Through" Glidepath

We continue to de-risk for a 5-year period after participants reach 65 because academic research shows that the majority of participants do not make withdrawals from their personal retirement accounts until age 70.5 (when minimum distributions are required).[i] In addition, we consider risk at the total portfolio level with a specific focus on balancing capital preservation and longevity risk (i.e. the risk of outliving one’s assets).

For more information on our target date mutual fund series, contact our team dedicated to serving DC Advisors at DCIntermediaryTeam@ssga.com.