Target Date Motifs
Target Date motifs are designed to provide you with a disciplined and diversified retirement portfolio that can fit your individual needs. Choose from eight motifs intended to keep your retirement investments allocated properly.
Value. Using ETFs with low expense ratios, Target Date motifs seek to provide steady returns at minimal cost.
Discipline. Target date strategies can provide investors with potential for gains from equities and other high-risk securities, while mitigating potential losses from over-exposure to a single asset class.
Rebalancing. You can choose to follow an annual rebalancing of Target Date motifs to help keep your portfolio moving toward retirement.
Flexibility. As with other motifs, you can easily customize your motif to best suit your own needs.
Detailed Asset Allocation
A key feature of Target Date motifs is the transparency into the security-level asset allocation instead of merely at the asset-class level. This detailed level of allocation allows increased control of the portfolio’s risk profile at every age. Target Date motifs allocate assets across the following securities:
1. Growth-oriented assets: US equities, International equities
2. Income generating assets: US bonds, International bonds
3. Inflation linked assets: Real Estate, Commodities
4. Treasury bills
Another key feature of Target Date motifs is the allocation to asset classes such as commodities and real estate. This exposure to these asset classes provides diversification and a hedge against inflation risk in the face of unprecedented levels of quantitative easing by global central banks.
From Early Years to Retirement
In the early years, growth-oriented and inflation linked assets such as equities, real estate and commodities make up as much as 80% of the portfolio with the balance allocated to conservative, fixed-income assets.
As you move toward retirement, the allocation to growth assets is gradually reduced in favor of low-risk and conservative assets such as bond ETFs and short-term T-bills. At the target date, growth-oriented and inflation linked assets make up around 35% of the portfolio while fixed-income assets and short-term treasury bills represent 55% and 10%, respectively.
Customers will be informed of the changing allocations and it is up to the customer’s discretion to follow motif rebalances.