Research, analysis, and thoughts on retirement investments & the future of personalization
Clayton Fresk joined Stadion Money Management in 2009 and currently serves as Portfolio Manager of Stadion’s Retirement investment strategies, which comprises oversight of Stadion’s managed account, target-date, and risk-based strategies. He provides thought leadership for Stadion’s participant level, customized retirement solutions, in order to ensure that its glide path technology and asset allocation are able to support all intermediaries in the defined contribution ecosystem. Clayton holds the Chartered Financial Analyst designation and is a member of the CFA Institute and the CFA Society of Minnesota. He also received an MBA degree and a Bachelor's degree in Finance & Marketing from the University of Minnesota.
As we continue to move on from a rough 2020, it is interesting to look back at Target Date Fund (TDF) flows to get a glimpse into how participants saved for retirement or unfortunately failed to save or, even worse, took withdrawals. While this glimpse does not give the total picture due to other investments available in retirement plans, we can still glean some interesting intel from TDF flows, both at a savings level and how the TDF industry continues to shift and morph.
We have emerged from a tumultuous 2020. Covid-19 took over our lives and, for many, livelihood. The election finally came and went. And after the newsworthy bear market in the 1st quarter, the stock market proved very resilient as it recovered this loss extremely quickly to close out the year at all-time highs. So how did all this noise affect Target Date Fund (TDF) performance?
After a very rough 1st quarter and a very strong bounce-back during 2nd quarter, the 3rd quarter was a bit more normalized, albeit still relatively strong. Performance during 3Q20 was, across-the-board, positive and enjoyed the springboard of a strong July and August despite a bit of a pullback in September
Target Date Funds (TDFs) are often categorized by being active or passive based on the makeup of the underlying holdings. Many issuers also offer blended or hybrid TDF series, which utilize both active and passive underlying holdings. However, the specific blend of active and passive holdings can be very different among issuers.